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NSE seeks Sh627mn in shares sale

NSENAIROBI, Kenya, July 23 -The Nairobi Securities Exchange (NSE) is set to raise Sh627 million in its sale of 66 million new shares at a price of Sh9.50 per share that was launched on Wednesday.

The minimum number of shares available for purchase is 500 and will cost Sh4,750. Thereafter, purchases are in multiples of 100 shares.

The offer which will run from July 24, 2014 and close on August 12, 2014 is open to domestic and international investors with interested parties having 14 working days to participate in the offer.

The IPO will culminate with the self listing of the NSE on the Main Investment Market Segment (MIMS) in September.

After the self-listing, the NSE will join the Johannesburg Stock Exchange (JSE) as the second exchange in Africa to demutualize and list itself.

Launching the offer, National Treasury Cabinet Secretary Henry Rotich said the IPO and self-listing of the NSE form part of the government’s policies to enhance governance standards and facilitate access to our markets by a wider community of investors.

“One of the key objectives of the Capital Markets Master Plan is to build on recent market reforms to address regulatory and institutional constraints in order to strengthen market infrastructure, intermediation, oversight and governance standards,” he said.

On his part NSE Chairman Eddy Njoroge urged Kenyans to take up the offer pointing out that it is a great investment opportunity.

“Self-listing is proof of our commitment to transparency and good corporate governance. It builds investor confidence in our business as a market operator and places the bourse in a better position to facilitate the further development of Kenya’s capital markets as envisaged in the Capital Market Master Plan,” Njoroge stated.

Njoroge said the aim of the IPO is to finance the acquisition of new generation technology systems that will provide the backbone for the listing and trading of new products.

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“We will soon roll out new products such as Real Estate Investment Trusts (REITs), Exchange Traded Funds (ETFs) and Derivatives in order to not only offer a wider range of investment channels, but to also present an easily accessible mechanism for hedging risks, be it on currencies, interest rates, minerals or agricultural produce,” Njoroge said.

All participating investors are required to have opened a CDS Account at the Central Depository and Settlement Corporation (CDSC), through their authorised CDS agents and to ensure that their records are correct.

Standard Investment Bank Investment Banking Director Amish Gupta told Capital FM Business that the stock is a great investment opportunity terming it as a great value for money.

“The beauty about the NSE is that it will model the performance of the entire market. If the entire market is doing well, and the economy is doing well then the NSE will do well and as a result when you buy you are really buying the economy of Kenya,” Gupta said.

He said going forward there will be new initiatives that will drive the business of the exchange.

NSE posted a 210 percent increase in net profit to Sh263 million in 2013 from the Sh84.78 million recorded in 2012.

Market capitalisation rose by 49.91 percent to Sh1.92 trillion while the NSE all share indexes moved up by 33 percent in the period driven by the 79.45 percent rise in equity turnover to Sh155.75 billion from the Sh86.79 billion recorded in 2012.

The exchange also plans to invest Sh250 million to upgrade the technological systems that will support the trading of equities, implement a new system for the trading of bonds, and implement systems to support the new markets that include REITS and ETFs.

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