NSE set to sign pact with Somalia stock exchange
Posted Tuesday, August 7 2012 at 19:39
- NSE shall be charged with technical development of the Somalia stock exchange.
- NSE and SSE will explore the location of the exchange, development of human capital, the trading mechanism and development of Shariah products.
The Nairobi Securities Exchange will Wednesday sign a memorandum of understanding with the Somalia Stock Exchange Investment Corporation (SSE) to co-operate in establishment of a stock market in the war ravaged country.
Kenya’s market regulators and operators have taken the role of big brother in helping develop stock markets in the East African region.
Ambassador Idd Mohamed and deputy permanent representative of Somalia to the United Nations will sign the pact on behalf of the Somalia Stock Exchange Investment Corporation.
“SSE shall be responsible for the implementation of the project and its subsequent operation. The NSE shall have primary responsibility for the technical development of the project,” said the NSE in a statement.
The NSE head of marketing and product, Donald Ouma, said the agreement would also help to attract investments by the large Somali Community.
“The parties will explore the location of the exchange, development of human capital, the trading mechanism and the development of Shariah products and services. It makes sense to explore business opportunities as the situation in Somalia stabilises,” said Mr Ouma.
The ongoing military action to flush out Al Shabaab militants in Somalia is expected to enter a decisive stage this month with the planned takeover of the port of Kismayu, the militant group’s main operational base.
The NSE is also monitoring the progress in South Sudan, which may also turn to Kenya for technical assistance in setting up a stock market.
The two Kenyan neighbours, South Sudan and Somalia, have been ravaged by many years of violence leaving them without any formal governance structures.
Kenya’s capital markets authority has played a role in the set up of Rwanda stock market and the current set up of the Burundi market through the East African Securities Regulatory Authority (EASRA).
Several Kenyan companies with regional operations have cross-listed in the East Africa stock markets with KCB listed in all five markets. Other companies include Nation Media Group, Equity Bank, Kenya Airways and Jubilee Insurance.
However, due to the underdevelopment of other markets some investors who have bought shares across borders have incurred losses.
Some companies, such as Centum Investment, have postponed their cross-listing plans. Centum Investments, which is already listed in Uganda, has delayed its listing in Tanzania and Rwanda.