Factors Hindering the Growth of the Dar es salaam Stock Exchange

This study specifically looks at the social and economic factors hindering the growth of stock market in Tanzania. It analyses some of these factors by looking on how they impact the development of Dar es Salaam Stock Exchange (DSE). The main focus will be on the most identified factors from the literature, by looking into some of the DSE market development initiatives such as Public awareness and education campaign, efforts to increase the depth and liquidity of the market, the stud will also look into the economic structure of the country, legal and regulatory framework and market information accessibility and how all these impacts positively or negatively into the growth of the local stock market. The study employed quantitative research approaches to assess factors influencing the growth of stock market development in Tanzania. The sampling design was random and 60 respondents from 18 institutions were randomly selected. 10 respondent were the staff at DSE while 50 were stakeholders who are members of the stock exchange : Stockbrokers,Nominated Advisers, the Regulator (CMSA) and Investment Advisers. The study establishes that the institutional factors particularly the legal and regulatory environment that ensures accessibility and protection of investors are in place and that the system is transparent to both issuers and investors. The study also finds that there is lack of public awareness about the market, most investors have poor knowledge about the operations of the DSE, it also noted problem of information accessibility to the issuers and investors. The study concludes that there are still challenges that hinders the growth of the DSE, as indicated in the study, and therefore more efforts are needed to address the slow level of growth of the local stock market as recommended in this study . the study recommends a suitable campaign to educate the public about the activities of the DSE and promote the culture of savings and investmentin the society. The recent introduction of both the Enterprise Growth Market and the mobile phone trading at the stock exchange are efforts to the right direction, but much need to be done to inform the public about the benefits of these initiatives; also, initiatives such as DSE Scholar Investment Challenge may in future result into DSE activities. Although the government` has provided fiscal incentives to attract both issues and investors to invest and raise capital through the stock exchange respectively; But they are yet to be fully understood and utilized by the intended members of the public.