The Nairobi Securities Exchange (NSE) will in October ink a deal with Shenzhen Stock Exchange, opening a window for Kenyan high-growth start-ups to raise cash and get nurtured at the Chinese technological innovation hub.
The NSE said Tuesday a team from Shenzhen will visit Nairobi to firm up a memorandum of understanding that will enable collaboration between Nairobi bourse’s Ibuka and Shenzhen ChiNext.
Chinext, which provides less stringent listing standards for fast-growing innovative businesses, is rapidly growing into a magnet for high-tech start-ups, rivalling US Silicon Valley.
“We have a growing Chinese population here, but other than that, our local companies can also get benefits directly from China through the stock market,” NSE head of business development David Irungu said.
“We are looking at spurring a lot of new initiatives and innovations within Kenya that need funding and we can fund that from China through (the collaboration). By coming to Ibuka, you are also accessing the Chinese markets.”
Ibuka is an 18-month programme mooted by NSE to nurture family-owned companies and other locally-owned firms to formalise their operations as well as books with a view to bringing on-board new shareholders via listing on NSE Growth and Enterprise Market Segment (Gems).
Some 16 firms have joined the incubation and acceleration programme geared at enhancing business structure, visibility and ability to attract investment from local and international investors.
Ibuka, Swahili for emerging, is expected to give birth to investor-ready firms to list on Gems which has struggled to attract new listing since June 2016 after launch in July 2013.
The Treasury has proposed to introduce an amnesty on the tax penalties and interest on any outstanding tax for two years before the listing for firms that list under the Gems market through the Finance Bill 2019.
Only Flame Tree Group Holdings — a profitable fast-moving consumer goods (FMCG) firm with operations in five regional countries and Dubai — remains on relatively strong financial footing among the five companies which listed on the Gems.