Joseph Bonyo
9 December 2009
Nairobi — Treasury is pitching for Kenyan corporate and Treasury bonds to be cross-listed on other East African Community exchanges, once they complete changes in ownership or demutualisation.
Permanent secretary Treasury, Mr Joseph Kinyua, said yesterday that the fixed income instruments should follow the example of listed firms, a number of which are cross-listed in Uganda and Tanzania.
Demutualisation, opening up of exchange ownership to non-stockbrokers, is currently under way at the Nairobi Stock Exchange and is expected to improve confidence in the bourse.
"I believe that with this as a commitment, we shall achieve our dream of not only being the financial hub in the EAC but in the whole of East and Central Africa," said Mr Kinyua
Five member states of the EAC recently signed a common market protocol aimed at facilitating trade and movement in the region.
This has resulted in calls for opening up of business opportunities across member countries anchored on ease of trade.
Efforts are currently being made to link up the five exchanges in search of more inclusive and robust capital markets.
The initial step of this has been pegged on the demutualisation of the bourses to facilitate the linkages.
"We need to position ourselves strategically to exploit the envisaged opportunities," added Mr Kinyua
The PS was speaking during the listing of the Safaricom Limited Sh7.5 billion mid-term bond at the Nairobi Stock Exchange.
The listed telecoms had sought Sh5 billion but realised a 50 per cent oversubscription from the market.
"This issue denotes the market's faith in our strategic direction. The money will go towards financing some key capital and operational projects," said the firm's chief executive officer, Mr Michael Joseph.
The bond market has this year attracted huge interest from investors, with both government and corporate bonds being over subscribed.
With the bond Automated Trading System going live, it is expected that the market will be able to trade Sh1 trillion in three years.
Speaking at the same event, Mr John Ngumi, director, corporate and investment banking, Standard Bank Africa, urged for telecoms issuing bonds to be categorised under infrastructure.
"The regulators should consider reviewing this to allow the telecom operators to list under the infrastructure category," he said.
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