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ABSTRACT
This is a study on the Challenges and Prospects of Dar es Salaam Stock Exchange (DSE) on
becoming an Efficient Financial Market in Tanzania. The study objectives were to examine
challenges faced by DSE, to determine efforts made to mitigate them and lastly to assess the
prospects of the DSE towards making an efficient market in future. The conceptual framework
was made considering information, liquidity and membership challenges also regulations
governing the DSE. In line with the Dependent Variable which is Prospects of DSE, considering
Efforts made to improve the DSE, DSE‟s Profitability and Performance as well as Potentials for
its progress.
The researcher used interviews and questionnaires to obtain primary data from a Sample of 67
respondents using Purposive Convenient Sampling Technique. Respondents included brokers,
listed companies and DSE officials. She used documentary reviews and mail survey from DSE to
get Secondary Data regarding the study objectives. The researcher adopted both Qualitative and
Quantitative Data Analysis Techniques. Qualitative data were analyzed through Content analysis
while Quantitative data were analyzed by descriptive statistics frequency tables, percentages and
pie charts by the help of Statistical Package for Social Sciences, SPSS.
Findings from the study indicate that there is very low public awareness regarding the DSE and
its operations, very few listed firms and market participants. The DSE is found to be a weak form efficient financial market and securities prices do not reflect information available but
constitutes the forces of demand and supply parse. Institutional investors hold stocks for a long
time, the market is therefore inactive. There is low foreigners‟ participation in the DSE. Policies
made to include telecommunication firms and oil and gas firms are not adhered to - they are not
listed due to political propagandas. Brokerage firms are still small and are based on town
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dwellers in Dar es Salaam only and no trading is done except through a broker. Despite these
challenges opportunities for the growth of Tanzanian financial market are massive!
The efforts made are, to increase public awareness, liberalization of capital account and
introduction of new technology- for trading more securities. DSE is profitable and expected to be
more efficient because opportunities for expansion are yet to be explored. There is room for
government to make well performing foreign companies and all telecommunication firms to be
part of DSE as it is done in other emerging markets in Africa. The East African Community may
make DSE vibrant by broadening chances of investments of idle funds, and the use of funds by
those in need all over the region.
There is a lot to do to promote savings and investments attitude; what has been done is not as it
should have been. The researcher recommends for adherence of policies and constant update to
make the market vibrant and secure. The government should introduce financial markets topics
in the curriculum for secondary education. It should raise funds of public sector entities through
the stock market. Also, brokers should work harder to get many clients and earn commissions
which are big enough for them to open up branches in other areas of Tanzania.
Other researchers can assess stock markets at regional level and also assess each product traded
separately. There is need for research on CMSA as a regulator of DSE |
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