CMA announces measures to encourage investment on the securities exchange

The capital markets in East Africa have been facing challenges amidst the global pandemic, but efforts are being made to stabilize and encourage investment. This week, the Kenyan Capital Markets Authority announced measures being taken and laws being reviewed in efforts to protect the markets and end IPO droughts. As the region slowly begins to open up, there is optimism for more East African countries to follow suit. Tanzania, one of the key players in the region, has seen a mix of performances in its stock markets during the first half of the year. While the overall market returns haven't been impressive, there have been some standout performers like CIDB gaining about 52% and SwissBot facing a loss of around 19% in market capitalization. The equity turnover has also seen fluctuations, with a significant decline in volume during the earlier months of the year, but a notable pickup in June. The CEO of Tanzania Securities Ltd., Maro Kohi Foremo, shed light on the efforts being made to stabilize the market in Tanzania. The financial system in Tanzania has seen various measures being implemented to improve liquidity, including a decrease in the discount rate and loan restructuring by banks. Despite challenges faced by cross-listed companies causing drops in market shares, the resilience of the economy and financial markets has been evident. However, the engagement of local investors remains relatively low, with foreign investors playing a key role in market movements. Efforts are also being made to encourage IPO activity and increase investor appetite in the country. Initiatives like the accelerator program for startups and SMEs, as well as support for microfinance companies and companies in strategic sectors like agriculture, mining, and manufacturing, are underway. With the crisis impacting global markets, Tanzania's conservative approach and strong regulatory supervision have helped maintain the resilience of its financial markets. Looking ahead to the second half of the year, as economies slowly resume operations, there is hope for the Tanzania capital markets to see positive growth. With sectors like tourism and entertainment being heavily impacted, there is an expectation for lower risks and a more positive market sentiment. Increased trading volumes, influx of foreign investors, and improved financial performance of companies are anticipated to drive a rise in stock prices and trading volume in the coming months.