NIC Bank rights shares start trading at bourse

NIC Bank on Tuesday listed an additional 98.72 million new shares at the Nairobi Securities Exchange (NSE) marking the conclusion of a cash call that began at the end of July.

The commercial lender, which becomes the second this year after Diamond Trust Bank to increase the number of issued shares through a rights issue now has a total of 493.62 million shares in the market.

At the start of trading of the new shares at the NSE, James Ndegwa, chairman NIC Group said the interest in the rights issue and the success reflected the confidence that investors have in the bank and in the Kenyan capital markets despite the upcoming elections.

“This is a confidence that must be natured and protected and one that needs to be rewarded by those in whom it is vested,” said Mr Ndegwa.

NIC bank was selling the new shares to existing shareholders in the ratio of one share for every four held at a price of Sh21 and was seeking a total of Sh2.07 billion.

The share issue however attracted Sh7.01 billion, an oversubscription of almost two and a half times pointing to the interest that the share issue generated among investors and the amount of money that they were willing to invest.

In 2007, the lender increased the number of shares in the market by 16.48 million through its first rights issue which was also oversubscribed by 49 per cent having attracted Sh1.7 billion.