Community Awareness of the Investment Opportunities in Dar Es Salaam Stock Exchange

Abstract

Purpose: This paper examines on the awareness status of individuals in Ilala Municipality (Dar es Salaam city) on the investment opportunities available at DSE (Dar es Salaam Stock Exchange) and participation of the individuals in exploiting such investment opportunities. The paper assessed on the awareness of individuals on investment opportunities available at DSE.  The specific objectives were to examine the awareness on investment opportunities found at DSE, to evaluate the factors influencing the community to capture awareness on investment opportunities found at DSE and to determine the relationship between the awareness and participation in DSE activities.

Methodology: The research was executed using a cross-sectional study design whereby respondents from different places within Ilala Municipality were approached as a source of primary data. A structured survey method of data collection was used; questionnaires were administered to 91 respondents who were obtained through convenient and purposive non-probability sampling. Statistical Package for Social Sciences (SPSS) was used for analysis that included frequencies and percentage. Cross tabulation was used to analyze the relationship between the awareness about the DSE and participation in the exchange. Multiple responses were used to analyze the contributing factors towards the awareness about the DSE and reasons for respondents to exploit the investment opportunities in DSE. 

Findings: The study found out that most of the respondents were aware of investment opportunities which are available at DSE. Factors that influenced the respondents' awareness of investment opportunities at the DSE can be ranked in order of importance starting with media reports/ publications, occupation/profession, social interaction and education/schooling. There exist a positive and direct relationship between the awareness of individuals on investment opportunities available at DSE and their participation in exploiting the investment opportunities at the exchange. Respondents who were participants in DSE investments stated the reasons for investing at DSE to be dividends, capital gains and investment preference. Additionally, the respondents who responded to be aware but were not investing at the exchange were asked to give reasons behind of not investing in the available securities at the exchange, and the reasons were low savings, riskiness to hold the securities as well as lack of interest and ignorance about the working of the securities.

Recommendations: The study recommended that strategies have to be adopted to enhance the investors and non-investors' awareness on various aspects pertaining to investment opportunities available in DSE. Steps have to be taken to attract more listings of companies to widen the investment scope. Insights pertaining to the DSE and its opportunities have to be incorporated in the education curriculum from ordinary level to higher learning institutions. Media has to be used efficiently and effectively by different entities that are directly involved in the securities industry including brokers and dealers, fund managers and investment advisory firms to impart awareness to individuals concerning stock exchange operations and the investment opportunities found at the exchange. Operations of DSE, have to be extended to the periphery (inland) of the country, instead of being nucleated in Dar es Salaam city. Actions have to be taken to encourage the prospective investors to put aside a portion of their monthly income through their employers for the purpose of investing in the available securities.