The Role of Information and Communication Technology on the Enhancement of Capital Market Performance in Tanzania.

Abstract

Globally, the use of Information and Communication Technologies (ICTs) in stock exchange markets has been cited to improve trading activities. However, despite of benefits of ICTs usage on securities exchange market some African stock exchange markets particularly Dar es Salaam Stock Exchange (DSE) market continues to experience poor market performance. This study investigated the role of ICTs in enhancing capital market performance in Tanzania on DSE market. A case study research design was applied in this study and data were obtained through questionnaires and interviews from 35 respondents recruited using purposive sampling. Data were analyzed using descriptive and content analysis methods. Based on the study's findings, it was revealed that computers, mobile phones, telephones, internet subscriptions, and websites were perceived as more useful ICTs for trading activities at DSE. Additionally, findings of the study showed that the majority of the respondents agreed that the use of ICTs has improved market information availability, decision-making process, customer services, and the market trading speed at DSE. Furthermore, it was also found that lack of training availability to learn ICT, poor ICT knowledge sharing, high cost of ICTs implementation, lack of ICTs skills, poor internet connections, instability of power supply as well as high price of internet service were the barriers affecting effective use of ICTs for trading operations at DSE to a great extent. From the analyzed data, it was generally concluded that the role of ICTs for enhancing trading performance at DSE is not impressive. It was recommended that ICT knowledge sharing culture be emphasized among market participants to facilitate knowledge acquisition. The Tanzania Government should take serious measures to lessen internet service prices and cover all areas in the country with high internet speed to allow real-time access to market information. It was also recommended that the Tanzania Government should find a reliable source of power to overcome irregularities in the power supply