NSE CEO on how the Kenyan bourse performed amid COVID-19 crisis

The Nairobi Securities Exchange (NSE) has shown resilience amidst the challenging backdrop of the COVID-19 pandemic, with the NSE All-Share Index recording a remarkable 6.6% increase year-on-year. In an exclusive interview with CNBC Africa, Geoffrey Odundo, the Chief Executive of the NSE, shed light on the factors driving the market's performance and the key trends that have emerged over the past year. Despite the disruptions caused by the global health crisis, Odundo highlighted the market's ability to adapt and thrive in the face of adversity. Reflecting on the tumultuous year that was 2020, Odundo acknowledged the initial shockwave that hit the market following the outbreak of the pandemic. However, he emphasized that the trading activities continued relatively smoothly, with trading volumes holding steady compared to the previous year. The shift to a fully automated mode proved beneficial in containing costs and streamlining operations, leading to over 100% increase in profits for the NSE. Additionally, the introduction of new products, such as exchange-traded funds (ETFs), garnered significant interest from both domestic and international investors, further bolstering the market's performance. One of the standout features of the NSE's performance was the increased participation of domestic investors, including pension funds, high-net-worth individuals, and retail clients. This surge in local interest helped offset the capital outflow from foreign investors, underscoring the market's attractiveness and potential for growth. Odundo attributed the market's success to the diverse pool of investors that have been drawn to the NSE, signaling a shift towards a more inclusive and robust financial ecosystem. In the realm of blue-chip companies, particularly banks, Odundo noted the cautious approach taken by some institutions in suspending dividend payouts to shore up their balance sheets. Despite this conservative stance, most banks remained profitable, buoyed by strong fundamentals and a focus on efficiency and digital innovation. The banking sector's resilience and adaptability to changing market dynamics contributed to their appeal among investors, with many banking stocks exhibiting robust performance and attracting significant trading activity. When quizzed about the standout equities in the market, Odundo highlighted the impressive performance of Bank of Kigali and Equity Group Holdings, both of which defied initial skepticism to deliver stellar results. The market's optimism towards these companies reflected investors' confidence in their growth prospects and strategic initiatives, further fueling interest in these stocks. Looking ahead, Odundo outlined the NSE's commitment to enhancing market accessibility and liquidity through innovative products and platforms. The launch of the NSE LLP, an over-the-counter trading platform for non-listed companies, aims to provide greater liquidity and investment opportunities for smaller enterprises and startups. Additionally, the introduction of real estate investment trusts and other securities offers a broader spectrum of investment options for a diverse range of investors. Addressing concerns over potential consolidation by institutional investors, Odundo emphasized the importance of scale and long-term capital for companies seeking growth and expansion. He encouraged businesses to embrace strategic partnerships and funding opportunities as a catalyst for driving sustainable growth and value creation, debunking fears of 'being swallowed by the big sharks.' In conclusion, the thriving performance of the Nairobi Securities Exchange amid challenging times underscores its resilience, adaptability, and attractiveness to a widening base of investors. The NSE's strategic focus on innovation, diversification, and inclusivity bodes well for its continued growth and prominence in the regional financial landscape.