NAIROBI, Kenya, Sept 9 – The Nairobi Securities Exchange (NSE) Initial Public Offer (IPO) has been listed and started trading at Sh17 up from the Sh9.50 the shares were sold at.
Outgoing NSE Chief Executive Officer Peter Mwangi says the exchange will use the proceeds to make investments to support the introduction of new products such as Real Estate Investments Trusts, Exchange Traded Funds and derivatives.
He says the funds will support the exchange separate its commercial functions from its regulatory ones.
“With the IPO funds we are now in a position to finance the acquisition of new generation technology systems that will provide the backbone for the listing and trading of these new products which going forward will not only have an incremental positive impact on the top line of the company but also contribute to the development of the overall economy,” he said.
The listing comes after a successful IPO which sought to raise Sh627 million by selling 66 million new shares at a price of Sh9.50 with 17, 895 investors applying for the offer.
“The demutualisation and the self listing of the NSE are part of the government’s plans to position Kenya as the financial services hub for East and Central Africa. The listing aims at enhancing accountability transparency market discipline as well as corporate governance, we seek to transform economic development and this is a step towards the direction, “said Industrialisation Cabinet Secretary Adan Mohammed.
On his part Acting Chief Executive Officer of the Capital Markets Authority Paul Muthaura says the authority remains confident that the exchange itself will take a front line proactive role in conjunction with the authority of monitoring market trading activity including the trading activity of its own shareholders to ensure that the spirit of demutualisation and self listing is upheld at all times.
“The Kenyan capital market has in the past 10 years raised more than Sh2.6 trillion which is above 60 percent of the country’s Gross Domestic Product. (GDP), even more noteworthy is that the total value of equity and bonds as measured by market capitalization is currently more than Sh3 trillion, which surpasses the size of the banking, pension and insurance sectors,” he said.
He also urged county governments to utilise capital markets products such as bonds, asset backed securities to raise funds to support development projects to reduce their reliance on revenue share allocations form the national government.
On his part, Treasury Cabinet Secretary Henry Rotich says more government companies are expected to be privatized and listed that include sugar companies, hotels and banks.
He said among the sugar companies that will be privatised include Sony Sugar, Muhoroni Sugar, Miwani Sugar, while in the banking sector they are looking at National Bank and Consolidated bank.
“We are currently working on the modalities of how they will be privatised some will be through an IPO and we will see them coming to the NSE,” he said.
After the self-listing, the NSE joined the Johannesburg Stock Exchange as the second exchange in Africa to demutualize and list itself.
