3 September 2014

Kenya: Bourse IPO Oversubscribed By Over 600 Percent

Nairobi — The Nairobi Securities Exchange (NSE) has posted a 663.7 percent oversubscription in its Initial Public Offer at Sh4.7 billion against the target of Sh627 million.

Investors applied for 504 million shares against the sale of 66 million shares garnering a subscription of 763.7 percent making it the highest oversubscription in the 60-year history of the Kenyan Market.

Applicants have been allocated the minimum number of shares applied for which was 500 shares in the first instance and there after receive new shares in the multiples of 100 offer shares until all offer shares have been fully exhausted.

The average pro rata allocation that has been used is 11.11 percent with applications received from 17,859 investors.

Listing and trading of the new shares is set for September 9, 2014.

"We would like to assure all our investors that the process of making refund payments is underway and will be completed well before the shares start trading on September 9th 2014," NSE chairman Eddy Njoroge said in a statement.

During the launch of the offer, Njoroge had said the aim of the IPO was to finance the acquisition of new generation technology systems that will provide the backbone for the listing and trading of new products.

"We will soon roll out new products such as Real Estate Investment Trusts (REITs), Exchange Traded Funds (ETFs) and Derivatives in order to not only offer a wider range of investment channels, but to also present an easily accessible mechanism for hedging risks, be it on currencies, interest rates, minerals or agricultural produce," Njoroge said.

The NSE also plans to settle a Sh300 million debt extended in 2012 which was partly used to finance the purchase of a building.

After the self-listing, the NSE will join the Johannesburg Stock Exchange (JSE) as the second exchange in Africa to demutualize and list itself.


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