Last checked at 
(For other news from Reuters Africa Summit, click on http://www.reuters.com/summit/Africa14)
* Two small banks, unit of Australian firm eye IPOs
* Tanzania finalising codes to push miner, telco listings
* Bourse wants state sell offs to deepen capital market
By Edmund Blair and Fumbuka Ng'wanakilala
DAR ES SALAM, April 11 (Reuters) - Tanzania's stock exchangeis pressing the government to sell shares in more state firms tohelp galvanise bigger private businesses to tap the capitalmarket.
Regulations that will push mobile telephone firms and miningcompanies to list on the main bourse were at an "advancedstage", Moremi Marwa, chief executive officer of the Dar es Salaam Stock Exchange, said in Tanzania's commercialcapital as part of the Reuters Africa Investment Summit.
He also said there were moves that could allow foreigninvestors to buy more than 60 percent of listed firms, raisingthe current limit that he said was the lowest in east Africa.
Like many other Africa bourses, Tanzania's exchange wants toencourage more firms to list or use the exchange to raise fundsvia corporate bonds, a potentially cheaper route than morecommonly used banks that charge 18 to 30 percent for loans.
The government could help by listing state firms to create amore liquid market for private issuers, many of whom are stillreluctant to use a bourse with just 18 listed firms, of whichsix are also listed in another country and only 12 are Tanzanianfirms.
"What we have been trying to say over the last few months isto try to educate policy makers because we think the governmentcan still do much to motivate capital market usage," Marwa saidin the 14th-floor offices of one of city's new towers.
The exchange is reviewing three requests from companies tojoin its Enterprise Growth Market for smaller firms, whichlaunched last year with the initial public offering (IPO) ofMaendeleo Bank that raised 4.8 billion Tanzanian shillings($2.94 million).
Marwa said at least two of those could receive approval andbe listed before the end of June.
He said applications had come from two community banks,which serve rural areas, to raise between 2.75 billion and 5billion shillings, and the Tanzanian subsidiary of Australianexplorer Swala Energy Ltd, which wanted to raise 3.2billion to 4 billion shillings.
REAL PRIZE
Energy firms working in Tanzania, which have made huge gasfinds, could be required to list local subsidiaries under a newlaw for the industry which has yet to be implemented.
Marwa said Swala was moving on its own initiative. "Theywant to supplement their capital that is coming from theirparent company," he said.
The real prize for the exchange, he added, was to securemore listings on the main bourse. He said he hoped state sell-offs could help achieve a target of two major IPOs this year,adding that the exchange had told the government at least 10state firms that largely met listing requirements.
"We have tried to build the case and communicate it to thegovernment to see the beauty of using the exchange," said Marwa,who took up his post in May, noting just seven of the more than350 firms privatised since the mid-1990s were sold via an IPO.
He said state-led IPOs would encourage more private firms tofollow suit by creating more liquidity on a bourse that now hasa market capitalisation of about 17.5 trillion shillings butonly 6.2 trillion shillings - about 12 percent of gross domesticproduct - if cross-listed firms were excluded.
Marwa said another step to encourage more listings would beto implement laws passed in 2010 that required local listings ofmining firms working under licence and telecoms operators, ofwhich there are now about six including Vodacom run by Britain'sVodafone and Airtel run by India's Bharti.
However, the laws have not been implemented because relatedregulations were not in place.
The exchange was also seeking to encourage companies toraise funds through corporate bonds on a market nowoverwhelmingly dominated by government bonds. There are now justfour corporate bonds worth less than 40 billion shillings.
Marwa said one challenge was to convince family owned firmsto open up and use the capital market.
For more summit stories, see
Follow Reuters Summits on Twitter @Reuters_Summits
($1 = 1632.0000 Tanzanian Shillings) (Editing by Drazen Jorgic and Erica Billingham)
