Nairobi Stock Exchange changes name

The Nairobi Stock Exchange has changed its name to the Nairobi Securities Exchange (NSE), paving way for introduction of a wider range of products.

The name change, which is the first since the exchange was established as a voluntary association of stockbrokers registered under the Societies Act in 1954, is one of the steps that were to be completed as part of a demutualisation process that has been put on hold due to a pending court case.

It will widen the NSE’s scope beyond a “stock” exchange to a “securities” market where other products such as futures, derivatives and Real Estates Investment Trusts (REITs) are traded.

“We applied for the name change in July and received approval in August,” Donald Ouma, the head of research and product development at the securities exchange told the Business Daily.

Mr Ouma said that besides stocks, the Nairobi Securities Exchange (NSE) offers a platform for the issuance and trading of debt securities and that the change of name is in line with its strategic plan to evolve into a full service securities exchange which supports trading, clearing and settlement of equities, debt, derivatives and other associated instruments.

Rules that will guide the restructuring of ownership of the exchange (demutualisation) rules are yet to be gazetted.

The NSE cancelled an annual general meeting that had been scheduled for September 29 that was supposed approve the demutualisation process. This was after it was served with orders from the High Court to put the process on hold until a case filed by directors of collapsed broker, Francis Thuo and Partners, is heard and determined.

The Capital Markets Authority CMA is in the process of introducing a futures market that is supposed to help stabilize commodity prices by smoothening out fluctuations caused by under-supply of commodities during low production periods and over-supply during high production periods.

According to a Reuters report, the CMA chief executive said that a futures market should be in place by the end of the first quarter of next year.

“It (the futures market) is expected to be in place by next year,” Stella Kilonzo, chief executive of the CMA told Reuters on the sidelines of a forum in Abu Dhabi.

“We are still in the procurement process ... and we have sent requests for proposals to companies that have qualified. All regulatory requirements also need to be in place. I think we can say by H1 next year.”

Applications were invited from local and international firms to bid for the operation of the exchange in June.