NSE targets self-listing of shares by June next year
CMA chairman Kungu Gatabaki. Brokers are against proposals by the CMA to have the fees for acquiring rights to the trading floor reduced drastically to Sh10 million or less. They want it restricted to those who can outbid everyone else. Photo/FILE
What you need to know:
The Nairobi Securities Exchange (NSE) has set a new target to self-list its shares by the end of the first half of next year
The new date is about one year later than initially scheduled, and comes amid revelations that a row with the regulator has stalled the bourse’s initial public offering
In an interview with CMA chairman Kung’u Gatabaki, it emerged that the regulator was increasingly at odds with the standpoint of the bourse’s intermediaries, who argue that they had previously auctioned a seat for as much as Sh250 million and there was no reason the price of a trading right should go as low as Sh10 million
The Nairobi Securities Exchange (NSE) has set a new target to self-list its shares by the end of the first half of next year, the manager in charge of marketing and product development, Donald Ouma, has said.
The new date is about one year later than initially scheduled, and comes amid revelations that a row with the regulator has stalled the bourse’s initial public offering (IPO).
Mr Ouma said in a response to the Business Daily’s queries that the NSE will be listed on the main investment market segment (MIMS), enabling the public to buy its shares.
The NSE mainly makes money through earning commissions from share and bond transactions, data vending and listing fees.
“We are in discussions with the CMA to progress both our application to demutualise and our application for self-listing via an IPO. We expect to list in the first half of 2014,” said Mr Ouma.
Disagreements between the stockbrokerage community and the Capital Markets Authority (CMA) have led to the delay in the listing.
Brokers are against proposals by the CMA to have the fees for acquiring rights to the trading floor reduced drastically to Sh10 million or less.
The market players want to have the access to the trading floor restricted to those who can outbid everyone else in a public auction conducted according to its own rules.
However, the NSE said it expected that the pending matters would be resolved during the first quarter of next year to allow listing before the end of the next quarter.
“The issues that are still outstanding should be resolved in quarter one of financial year 2014,” said Mr Ouma.
In an interview with CMA chairman Kung’u Gatabaki, it emerged that the regulator was increasingly at odds with the standpoint of the bourse’s intermediaries, who argue that they had previously auctioned a seat for as much as Sh250 million and there was no reason the price of a trading right should go as low as Sh10 million.
Specifically, the intermediaries point out that Renaissance Capital bought a seat for Sh250 million and the two recent entrants, CBA Capital and Equity Investment Bank, are said to have bought theirs for at least Sh150 million each.
“The best way to realise the right price for a seat is to auction it. Then you will have serious bidders.
“If the entry fee is very low, it might breed corruption because there would be so many people willing to pay the amount and it could depend on who can pay the biggest bribe,” said Bob Karina, a director of the NSE.
