NSE chairman Eddy Njoroge during the launch of the bourse’s IPO in Nairobi July 24, 2014. Photo/DIANA NGILA
What you need to know:
NSE, which has priced its shares at Sh9.50 each with minimum 500 units buyable at Sh4,750, is eyeing Somalia, South Sudan, the Democratic Republic of Congo and Burundi to reduce its exposure to Kenya.
The bourse will be selling 66 million shares to the public in the next three weeks till August 12. They will start trading at the exchange on September 9.
NSE signed a memorandum of understanding with the Somalia Stock Exchange Investment Corporation (SSE) to co-operate in establishing a stock market in the war ravaged country two years ago.
Nairobi Securities Exchange (NSE) on Wednesday disclosed plans to open exchanges in four African markets as it launched its share offer to the public.
NSE, which has priced its shares at Sh9.50 each with minimum 500 units buyable at Sh4,750, is eyeing Somalia, South Sudan, the Democratic Republic of Congo and Burundi to reduce its exposure to Kenya.
“NSE’s revenues are not adequately diversified to mitigate against fall in revenues in Kenya. NSE is exploring initiatives to diversify its revenues including operating exchanges in other neighbouring countries,” reads the company’s prospectus.
The markets targeted by the exchange do not have bourses following years of chaos. Kenya’s market regulators and operators have taken the role of big brother in helping develop stock markets in the East African region.
“They are growing markets and we think we could provide a platform for companies in those markets to reach capital,” said Mr Donald Ouma, the head of market and product development at the exchange.
Governments of countries such as South Sudan have been looking at ways of privatising some of their state owned companies.
NSE signed a memorandum of understanding with the Somalia Stock Exchange Investment Corporation (SSE) to co-operate in establishing a stock market in the war ravaged country two years ago.
The exchange is also looking at ways of diversifying its income streams and will be using proceeds from the IPO to upgrade its IT platform so as to support new products.
The NSE mainly makes money through earning commissions from share and bond transactions, data vending and listing fees.
The regulatory filings show NSE expects to raise Sh627 million from the offer which will be used to settle its headquarters’ mortgage with KCB and upgrade its information technology.
NSE will be selling 66 million shares to the public in the next three weeks till August 12. They will start trading at the exchange on September 9.
For the offer to be successful NSE is targeting a minimum subscription of 68.8 per cent. The company is optimistic, arguing that the price of the share will attract retail investors.
“We believe that this is an exciting investment opportunity for investors with a low risk profile in the near term and may be more attractive in the long term once their initiatives bear fruit,” said analysts at Old Mutual.
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