5 June 2007

Kenya: NSE Get Fifth Investment Sector

Nairobi — The listing of AccessKenya shares at the Nairobi Stock Exchange (NSE) has provided a base for the establishment of a fifth investment segment at the bourse-the technology sector.

This is in addition to the already existing agricultural, commercial and services, finance and investment and industrial and allied sectors. Speaking during the listing of AccessKenya shares at the NSE, Capital Markets Authority (CMA), Chief Executive, Mr Edward Ntalami said that the new category would expand the range of investment products available to investors.

He said that there are at least 12 other Information Communication Technology (ICT) companies in Kenya that are eligible for listing at the NSE.

"We applaud AccessKenya for giving us the seed for the fifth sector on our board, the technology sector. Our challenge is now to build on it and I hope that AccessKenya will not remain alone in the technology sector," said Ntalami.

Build market confidence

Ntalami urged brokers and other capital market players to raise the level of institutional capacity and professionalism in the capital markets, saying that capital markets the world over are driven by market confidence.

"Any perception that the playing field is not level, that the professionals use information unavailable to the public, damages the integrity and threatens the economic stability of the market," said the CMA chief executive. He added that an announcement would be made soon concerning the fate of the collapsed stock brokerage firm- Francis Thuo and Partners Ltd, currently under receivership.

Ntalami said that the CMA and the NSE (who are the receiver managers) had already established that the firm is insolvent and that it is not likely to honour all obligations to its creditors.

The receiver manager, he added, is therefore looking at the option of liquidating the firm. He however assured investors that none of them would loose any investments held with the broker prior to its collapse. Speaking at the same function, NSE Chairman, Mr Jimnah Mbaru asked more companies to take advantage of the five-year tax holiday for new companies listing at the bourse, as the incentive may not last indefinitely.

The Government has put in place an incentive of lower corporate tax rate of 20 per cent for all new companies floating at least 40 per cent of their issued shares at the stock exchange.

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