16 April 2014

Kenya: NSE Plans to Open Up Share Sale Before July

OPENING up of the Nairobi Securities Exchange ownership to the public looks set to be completed before end of the year.

NSE chief executive officer Peter Mwangi said preparations for the process known as demutualisation will be completed soon adding that the final application has already been made to the CMA. This will open up the ownership of the company that manages the financial markets to more than just the current 24 owners.

"We hope to complete the demutualisation this month. We have made a final application to CMA and expect that the regulator will get back to us with an approval," said Mwangi yesterday during a media briefing to announce the firm's 2013 financial performance.

Mwangi said the bullish trend at the country's financial markets in 2013 attracted many transactions resulting into a net profit jump of 210 per cent for the Exchange. During the period, NSE's net profit rose to Sh262.8 million from Sh84.8 million recorded in 2012.

Revenue rose by 62.03 per cent to Sh622.7 million compared to Sh384.3 million that was recorded in 2012 driven by increase in transaction fees. This is the first time the NSE, which plans its own IPO soon, is making a public announcement of its financial performance since its establishment 60 years ago.

Last year, market capitalisation rose by 49.9 per cent to Sh1.92 trillion with equity turnover totalling Sh155.8 billion from Sh86.8 billion previously.

"It was one of our best years ever," said Mwangi.

Transactions by foreign investors remained slightly above 50 per cent, Mwangi said, adding that even domestic investors had increased their trading volumes owing to the bullish state of the market.

The company will double dividend for its shareholders to Sh2 per share for the year ended December 2013 resulting in a total payout of Sh49 million.

The demutualization plan has been on the table since 2005 and was approved by shareholders in March 4 2010 during an extraordinary generl meeting.

It will see the NSE float shares in an initial public offer slated for first half 2014, said Mwangi.

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