STOCKS/SHARES

Stocks represent ownership in a publicly-traded company. When you buy a company's stock, you become part-owner of that company. For example, if a company has 100,000 shares and you buy 1,000 of them, you own 1% of it. Owning stocks allows you to earn more from the company's growth and gives you shareholder voting rights.

In Tanzania companies stocks are traded publicly and regulated by the Dar-es-Salaam Stock Exchange.Till to date there are 29 companies registered which their shares can be traded by the DSE.

REWARDS & RISKS OF INVESTING IN STOCKS

Advantages of Stocks

1.Increase in its share price(capital gain):This means that when you decide to sell your shares you will earn a profit the share price has increased.

2.Dividend Payouts: When some companies get profit they decide to give dividends to their investors.
Example: Dar es Salaam Stock Exchange had declared dividend as of 2021.
The Dividend amount per share was 114.16TZS.
That means if you had 100 shares of DSE you would get total dividend of 11,416TZS.

3.Stocks can be transferable and can be used as collateral(dhamana/amana)

Risks of Stocks

1.Capital loss:This means the share price of a company has decreased so if you decide to sell you will have loss

2.Bankruptcy or decline of a company

3.No dividends:Some companies do not provide dividends to their investors

How to Invest in Dar Es Salaam Stock Exchange

First, investors who are interested in buying stocks in Tanzania need to open an account with one of the Dar Es Salaam Stock Exhange brokers.

1. Complete the CDS Account Opening Form Your broker will give you an application form. Once it is filled out, you will get Central Deposit System (CDS) account number. All your trading will be recorded using this number.
2. Complete the Broker’s Account Opening Form You will need to fill out KYC form that requires personal details such as ID number, address, preference for collection of dividends and payment of fees. You will also need to submit copy of your passport or driver’s license.
3. Wire Funds to Your Brokerage Account You need to transfer funds for trading to your broker’s account. You can do this through a wire transfer or any other convenient money transfer method.
4. Submit a Trade Order You then need to communicate with your brokers specifying the shares you want to buy.