News Column

Public to Finally Have a Piece of the NSE

July 4, 2014

Constant Munda



THE public will finally have a chance to buy shares in the 60-year old Nairobi Securities Exchange by end of the year. The exchange is set for self-listing through an initial public offering "in the second half of 2014", chairman Eddy Njoroge has said.

This follows approval by regulator the Capital Markets Authority on June 27 for the NSE to demutualise - convert to a company owned by shares from one owned by guarantees - and subsequently list on the trading floor.

The green light was for the 'NSE trading participant rules and the NSE trading participant business conduct and enforcement rules' following an application on April 1.

In the new company to be listed, the 22 brokerage firms that own the NSE will cede 10 per cent shareholding to the State through the National Treasury and CMA's investor Compensation Fund which will divide it equally between themselves.

"Demutualisation is a statement of our commitment to transparency and good corporate governance," Njoroge said in statement. "...the ownership of the NSE is separate from the right to be a trading participant (a stockbroker or investment bank). Members of the Kenyan investing public can now own shares in the NSE. "

The resultant confidence, he said, will facilitate the country's ambition to become a capital market gateway of East and Central Africa by 2023 under the CMA's 10-year master plan from 2014 and the national long term development blueprint, the vision 2030.

The demutualisation process started in May 2006 when a committee was installed to spearhead it with Ernst and Young as advisory consultants. It however dragged on until 2009 when a steering committee was appointed by President Kenyatta, then minister for Finance.


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Source: AllAfrica


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