NIC Bank chairman James Ndegwa said the overwhelming interest in the Rights Issue that saw it exceed its Sh2 billion target by almost Sh5 billion, is a sign of the amount of confidence investors have in the country/CFM
NAIROBI, Kenya, Oct 23 – Following the oversubscription of its Rights Issue by 238 percent, NIC Bank has begun trading of the new shares on the Nairobi Securities Exchange.
NIC Bank chairman James Ndegwa said the overwhelming interest in the Rights Issue that saw it exceed its Sh2 billion target by almost Sh5 billion, is a sign of the amount of confidence investors have in the country as a stable investment market.
“This is a confidence that needs to be nurtured and protected and one that needs to be rewarded by those in whom it is vested,” he said.
Having already entered the Uganda market in June of this year, NIC intends to use the funds to expand into the greater Eastern African region.
Finance Minister Njeru Githae, who was the chief guest at the ceremony, urged Kenyans to participate in the bourse, having seen the performance of the NIC Bank’s Rights Issue a few months before the General Election.
“You can see the confidence that the investors have in the people that are managing this economy. For the first time in the history of this country during an election year Foreign Direct Investment is going up,” he said.
IMF’s latest Regional Economic Outlook for Sub-Saharan Africa revealed that resilience in the region’s economies, coupled with the search for yield against a backdrop of low world interest rates, is producing growing interest in the region among investors.
“We could well see more such bonds issues in 2013 and more capital inflows into domestic bond markets. Nigeria’s draft 2013 budget includes plans for a $1 billion bond issue and Rwanda has announced plans to complete a sovereign bond issue of $350 million before year end,” Antoinette Monsio Sayeh, Director of the IMF’s African Department said.
Yields have also declined significantly on pre-existing bond issues from sub-Saharan African economies; the report showed and are now at levels comparable with yields for several emerging European economies.
Kenya is expected to issue a sovereign bond in the next financial year (2013/14) worth between $500 million and $800 million.
