Nairobi bourse debuts at 88% high - CNBC Africa

Nairobi bourse debuts at 88% high

East Africa

by Elayne Wangalwa 0

Trading of the Nairobi Securities Exchange (NSE) shares commenced today and closed at 16.30 shillings. PHOTOS: NSE/Getty Images

"The Nairobi bourse which is the second exchange in Africa after the Johannesburg Stock Exchange to self-list traded at a high of 18.00 Kenya shillings on its first day of trading and closed up 71.6 per cent on the Initial Public Offering (IPO) price of 9.50 shillings." 

(READ MORE: NSE launches its initial public offering

The NSE self-listed its shares on the Main Investment Market Segment (MIMS) after it reported that its recent IPO had been oversubscribed to 663.92 per cent. The bourse received 4.789 billion Kenyan shillings counter its target of 627 million Kenyan shillings garnering a subscription of 763.92 per cent, the most oversubscribed offer since the bourse was founded 60 years ago.

“We at the NSE show that we believe we have made the right choice to join the family of companies aiming at being more open and transparent to their shareholders, the public, the government and other stakeholders,”  Peter Mwangi, chief executive at the bourse said during the bell ringing ceremony of the NSE’s listing.

“Our listed companies and market intermediaries are assured that the exchange will make the necessary investment in infrastructure to support the business of operating a bustling market.”

(READ MORE: Kenya shilling holds steady as NSE begins offer for IPO sale)

Mwangi said the proceeds from the IPO will go towards making investments to support the introduction of new products, “Such as Real Estate Investments Trusts (REITS), the Exchange Traded Funds (ETFs) and derivatives.”

The bourse is intending to double the number of listed companies from the current 61 to over 100 in the next four years and increase market capitalisation to 4 trillion Kenyan shillings. Currently market capitalisation stands at 2.2 trillion Kenyan shillings.

In June, Kenya’s Capital Markets Authority (CMA) approved the demutualisation and self-listing of the NSE. The IPO is said to have boosted the NSE’s capital base tremendously by unlocking an additional 603 million Kenyan shillings funds.

(READ MORE: Nairobi bourse hits record high on its IPO)

Paul Muthaura, acting chief executive of Kenya’s Capital Markets Authority (CMA), commended the bourse for the oversubscription of the IPO leading to the self-listing as well as the implementation of the systems and technologies which ensure the Kenyan market is linked with others around the globe.

“This is a dynamic call for us all to ensure appropriate attention and support is granted to the capital markets to play an ever increasing role in national economic development,” Muthaura said.

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