NSE pushing for Chinese investors to tap local capital

The Nairobi Securities Exchange (NSE) in the coming months plans a marketing tour of China to tap Asian investors to the Nairobi bourse.

NSE chief executive Geoffrey Odundo told Xinhua, the official Chinese news agency, that currently there is minimal Chinese capital at the NSE even though by listing on the bourse the local Chinese firms could access long-term capital at cheaper rates.

“We are therefore planning to conduct road shows in China in the coming months so that we create awareness of the NSE,” Mr Odundo was quoted saying.

He said the NSE has already signed a memorandum of understanding with the Shanghai Securities Exchange to enhance knowledge sharing between the two exchanges.

Under the agreement, Kenya will be assisted to develop products that appeal to Chinese capital markets investors. He added that some NSE executives would also be dispatched to the Shanghai bourse to learn lessons.

According to Capital Markets Authority (CMA), most foreign investors seek investment opportunities for short to medium-term returns in line with their financial goals.

“This is why in the third quarter of 2016, for instance, foreign equity turnover was above 70 per cent, against a local turnover figure that averaged less than 30 per cent of total turnover,” said the CMA in November.

At the time, with just 8,085 and 664 foreign individuals and local investors respectively, foreigners commanded the equity market, including most of the best performing counters.

Several Chinese companies operate in the country, especially in the capital-intensive construction industry, but the economic behemoth is yet to interact with the local capital markets.