Archive for the 'Kenya' Category

Africa IPO round-up

A roundup of some recent initial public offers (IPOs) of shares on Africa’s stock exchanges to raise capital

In early October, MTN launched plans to sell up to 35% of shares on the Ghana Stock Exchange. Ghana’s Securities and Exchange Commission Director General Adu Anane Antwi confirmed they had started the listing process and were working on the prospectus but no timeline had been given. According to local reports, MTN received its 15-year 4G licence in 2015 after spending $67.5m and on condition that it lists. It hopes to raise up to $500m.
MTN Nigeria is also working on plans for an initial public offer (IPO) of shares on the Nigerian Stock Exchange in 2017 which could raise up to $1bn. Nigeria is among several African governments encouraging telcos to list on local bourses and listing is among conditions to settle a record NGN330bn ($1.1bn) fine for failing to disconnect 5.1m unregistered subscribers. Nigeria contributes a third of sales and profit for the Africa’s biggest phone company, which is listed in Johannesburg with market capitalization of ZAR212.8bn ($15.3bn) in early October.
Listings and capital-raising momentum has been maintained on the Nairobi Securities Exchange. Deacons Kenya is the first listed fashion retailer, after joining the Alternative Investment Market Segment (AIMS) of the NSE on 2 August. CEO Muchiri Wahome said the extra funds were to fund expansion into towns with “a vibrant middle class” across Kenya, spurred Kenya’s rapid and ambitious devolution and setting up 47 counties under its 2010 Constitution. Deacons is also eyeing opportunities in neighbouring Rwanda and Uganda. It will also help existing shareholders who want to sell. The retailer listed about 123m shares at an opening price of KES15 ($0.15) each, but by early October the price had slumped to KES8.55.

 

Nairobi centre (credit www.kenya-advisor.com)

Nairobi centre (credit www.kenya-advisor.com)

In June, leather and shoe retailer Nairobi Business Ventures, which operates the brand KShoe, had become the fifth listing on the NSE’s Growth and Enterprise Market Segment aimed at smaller businesses. It was listed through introduction and valued at KES118m ($1.2m). Previous 2016 share issues included Longhorn Publishers in May. In June power generator Kengen succeeded in the Kenyan bourse’s largest rights issue, raising KES26.4bn ($262.1m) by offering 4.4bn new shares at KES6.55 each, with a 92% subscription rate. Kengen has projects to generate another 700MW of power, of which 605MW is geothermal.
However, Fusion Capital had to cancel its IPO despite extending twice after only getting 38% uptake and four investors for its KES2.3bn offering and failing to meet the minimum threshold.
The Johannesburg Stock Exchange had its second private equity listing. Universal Partners raised R1.3bn ($93.7m) in an IPO which was only open for 4-5 August and started trading on the Alt-X market on 11 August. The company was registered in Mauritius in April and also listed on the Stock Exchange of Mauritius. Its mandate is to invest in properties across Europe, at £10m-£30m ($12m-$37m) each and it aims to start investing within six months. The IPO was for 72m shares at R18.07 each. Several companies aiming to raise capital for African and international investments have dual-listing on the Mauritius and Johannesburg exchanges.
Liberty Holdings is likely to follow up its Kenyan IPO success with a South African Real Estate Investment Trust (REIT) called Liberty Two Degrees in December. This will include some ZAR6bn of its existing portfolio, including iconic malls around Gauteng, and ZAR4bn of new money. As in Kenya, the property investments are managed by Stanlib.
West Africa’s integrated regional stock exchange, Bourse Regionale des Valeurs Mobilieres (BRVM), based in Abidjan, Côte d’Ivoire, plans to build a platform for listing mining shares and raising capital locally. The exchange is talking with Canada’s Toronto Stock Exchange (TMX Group), a favourite bourse for early-stage mining entrepreneurs. BRVM General Manager Edoh Kossi Amenounve says it could open by 2018 and will be for companies exploring or operating mines in the region. There is likely to be a waiver to the usual requirement for 2 years of trading history. The BRVM links eight West African countries, including gold exporters Mali, Burkina Faso and Côte d’Ivoire, and fourth-largest uranium producer, Niger.
Egypt’s Minister of Investment Dalia Korshid says the Government aims to raise up to $10bn over the next three to five years with IPOs of government-owned companies in the oil sector but will start with restructuring state-owned electricity companies.

Will Interswitch be Africa’s first $1bn tech “unicorn”?

Nigeria’s digital payments and payment card giant Interswitch Ltd could become Africa’s first tech “unicorn” or technology company valued at over $1 billion. Private equity firm Helios Investment Partners (majority owner) is preparing to sell and Citigroup Inc are hired to handle the sale, which could involve an initial public offer (IPO) and listing on the London and Lagos stock exchanges.
Website TechCrunch reported that Interswitch has 32 million customers for its “Verve” chip-and-PIN cards and its Quickteller digital payment app processed $2.4 billion in transactions. It processes most of Nigeria’s electronic bank, government and corporate transactions.
A subsequent report from Bloomberg says Helios paid $92 million for a 52% stake in 2010.
Techcrunch contributor Jake Bright (Twitter @JakeRBright, co-author of The Next Africa: An Emerging Continent Becomes a Global Powerhouse) reports that Interswitch CEO and founder Mitchell Elegbe told him no final decision has yet been made and they are also mulling the option of a trade sale.

Mitchell Elegbe CEO Interswitch (from www.naij.com)

Mitchell Elegbe CEO Interswitch (from www.naij.com)


Bright’s Techcrunch report also cites Eghosa Omoigui, Managing Partner of EchoVC, a Silicon Valley fund investing in African start-ups: “They’ve already selected the ibankers and will likely go public sometime between Q2 to Q4 at (or close to) a $1 billion dollar valuation–roughly two times revenues,”.
Bright points out that there are strong tech opportunities for ventures focused on digital commerce and payments, and cites research by Crunchbase that VC investors put $400m into African consumer goods, digital content and fintech-oriented startups. Helios and Adlevo Capital back ventures such as MallforAfrica (e-commerce) and Paga (payments).
Although Kenya has the spotlight still, because of the runaway success of Safaricom’s M-PESA product, which has 13m customers and generated $300m in revenues for Safaricom in 2014, consumers in Nigeria are projected to generate $75bn in e-commerce revenue by 2020. See this McKinsey report on future consumer spending trends in a youth-driven market.
Interswitch – motto “bills aren’t fun but payments solutions can be” – is still building digital finance market share in Nigeria and in 2014 bought Kenya’s Paynet and also has operations in Uganda, Tanzania and Gambia. The IPO could support plans to expand into more countries – Cameroon, Democratic Republic of Congo and Ghana were mentioned in an earlier Bloomberg article.
Elegbe, age 43 years, founded Interswitch in 2002.
Bloomberg reports that if this goes ahead, it will be one of the few private equity exits at a valuation of over $1 billion. It also cites Bain Capital’s $1.2bn exit from South African retailer Edcon’s private label store cars in 2012, sold to Barclays Absa unit. It says increasing use of e-commerce worldwide makes payments-processing industry a “structural growth market”.
The London Stock Exchange has more than 120 African listings.
In its 2010 press release, Helios described the company: InterSwitch provides shared, integrated message broker solutions for financial transactions, eCommerce, telecoms value-added services, eBilling, payment collections, 2 and also administers Verve, the leading card scheme in Nigeria. The Verve card, which is currently issued by 16 out of the 24 banks in Nigeria, is the first and only chip-and-pin card accepted across multiple payment channels including Automated Teller Machine (“ATMs”), Point of Sale (“POS”) terminals, online, mobile and at banks. InterSwitch has been at the forefront of the development and growth of the epayment sector in Nigeria which is evidenced by its unique position of being the only switching and processing company connected to all banks in the country as well as over 10,000 ATMs and 11,000 POS terminals. In addition, InterSwitch is the leading processor for Mastercard and the market leader in merchant acquiring/POS, a segment which is still emerging and has potential for tremendous growth in Nigeria. Babatunde Soyoye, Managing Partner and Co-founder of Helios added: “InterSwitch is a Nigerian success story having been led by a superb management team and benefiting from the foresight, innovation and support of its founding shareholders, and a supportive regulator in the Central Bank Nigeria.”

Kenya’s revolutionary mobile phone M-Akiba bond on 21 Oct

Nairobi centre (credit www.kenya-advisor.com)

Nairobi centre (credit www.kenya-advisor.com)

Kenya’s National Treasury will float a KES5 billion ($48.6 million) M-Akiba bond which will only be purchased through mobile-phone platforms. The minimum investment will be KES3,000 ($29.13) and the maximum KES140,000, which is the maximum allowed in a single mobile-money transaction (it can be increased by making more applications).
The 5-year infrastructure bond will float on 21 October. The National Treasury and Central Bank of Kenya will set the rate, which will be free of income tax. Finance Cabinet Secretary Henry Rotich said the rate will be higher than rates offered by commercial banks (currently 1.37% on cash in savings accounts) but did not give more details.
It is unlikely to be as high as the soaring rates in local money markets – a 91-day treasury bill was at 20.637% at the auction for value dated 5 Oct, up from 18.607% on 28 Sept according to the CBK and 182-day paper on 28 Sept was 14.5%. The Government’s 1-year KES30bn bond sold at a record rate of 19.062%, offering the biggest returns for investors in 3 years. Kenya’s inflation in Sept 2015 was 5.97%, up from 5.84% the previous month and above expectations, according to www.tradingeconomics.com.
The new bond will only be available to Kenyans, who currently make up 2% of investors into bonds listed on the Nairobi Securities Exchange (NSE).

Innovative mobile money tech
The innovative Treasury Mobile Direct (TMD) platform means individuals will buy the bonds instantly instead of the previous 2-day process. Potential customers will only need to have a mobile phone line and subscription to a mobile-money transfer service, which will enable telcos to open an electronic account with the CDSC on their behalf, as well as a valid ID. They will dial *889# and follow the prompts. Treasury will pay the coupons every six months through Safaricom mobile transfer service M-Pesa.
M-Akiba aims to help more people save and invest and make it easier for the Government to raise funds and diversifying their investor base. Stephen Chege, corporate affairs director of mobile phone company Safaricom, was quoted in this news story in Nation as saying it would help build a savings culture: “Currently, only 11% of Kenyans save on a regular basis as compared to 22% in Rwanda and Uganda, while in Qatar this figure stands at 60%.” Up to 23m Kenyans could participate. The National Bureau of Statistics says the rate of savings has stagnated and remains far below the medium-term targets.
The bond was launched on 28 September, and NSE chairman Eddy Njoroge said: “Our bond market is currently dominated by foreign and local institutional investors, M-Akiba is in line with NSE’s strategy of enhancing financial inclusion by driving retail investor participation.”
The prospectus will be released on or after 16 October.
Rose Mambo, CEO of the Central Depository Settlement Corporation (CDSC) was reported as saying: “This will be a vanilla bond attracting a fixed rate of interest and redeemable in full on maturity which will not be affected by changes in the market interest rates and the principal is secure.”
Previously the minimum investment possible in a Treasury bond was KES50,000.

Mobile money reach
Mobile money bond investments will be a technology revolution for world capital markets.
According to CNBC, mobile penetration across Kenya was last recorded at 83.9% for the period between April and June 2015, according to the Communications Authority of Kenya. The mobile money service M-Pesa has become a formidable competitor for local banks since it was launched by Safaricom in 2007 and last recorded a total of 23.3m customers, more than half of the country’s near 44m population. Statistics from digital finance researcher Financial Inclusion Insights show over 62% of Kenyans actively managed money on their mobile phones in 2013, compared to 21% who held bank accounts.

AfDB $400,000 seed equity to central depositories link Africlear Global

The central depositories of Kenya and Nigeria, two of the most dynamic in Africa, have formed a joint venture with Altree Financial Group. The African Development provided $400,000 in seed equity capital to the new Africlear Global venture, which aims to boost the efficiency of African capital markets by supporting modernizing the infrastructure of the central securities depositories.

The partners are Kenya’s Central Depository and Settlement Corporation (CDSC), Nigeria’s Central Securities Clearing System (CSCS) and Altree. However, several more African central depositories are interested in joining.

Africlear will help the depositories to pool their resources and boost buying power on equipment. They will work together to identify, acquire and maintain critical systems and technology, for instance for corporate actions, recording shareholder votes and other investor support services. The depositories will also share information and expertise.

The African Development Bank (AfDB) invested $400,000 in seed capital through the Fund for Africa Private Sector Assistance in an agreement signed 5 March in Abidjan. This may inspire more investors to join in building the company.

Africlear will use the money to improve the infrastructure used for post-trading processes such as settlements after a sale is done. According to AfDB press release: “The goal of the investment is to enhance the efficiency of capital markets by supporting the modernisation of central securities depository infrastructure in African securities markets.” Solomon Asamoah, AfDB Vice-President, Infrastructure, Private Sector and Regional Integration, and Anthony Fischli, Director, Africlear Global, signed the Shareholder and Subscription agreements on behalf of the Bank and Africlear Global, respectively.

Rose Mambo, CEO of CDSC, is the chairperson of Africlear. She was reported in Standard news in Kenya saying: “Africlear members will be able to realise significant cost savings via collective bargaining with industry participants and technology vendors. Africlear will also allow its members to offer more services ranging from corporate actions processing and collateral management to clearing and settlement.”

Kyari Bukar of CSCS said Africlear will accelerate process standardization and promote system integration across the borders. “By employing industry best practices, Africlear will facilitate improved levels of transparency and corporate governance within the African capital markets. This will enable local market practitioners to effectively compete for domestic and international capital.”

The board of Africlear held its first meeting in Nairobi on 24 April 2015. The members also include Altree Financial Group chairman Anthony Fischli and a representative from the AfDB to be named. Fischli said: “Africlear supports an open marketplace where scale and connectivity serve as the company’s competitive strengths” Benefits for investors should include improved access to securities services, collaboration between countries and cost-effective pricing of infrastructure.

Fischli told AfricanCapitalMarketsNews on 11 May that Africlear could also help the different countries’ and exchanges’ central depositories in future if they want to establish links. Fischli said in a press release “The AfDB investment in Africlear Global supports the improvement of securities market infrastructure through promotion of industry-leading technologies designed to enhance the underlying efficiency and overall functioning of the African capital markets.”

Kenya’s Business Daily reports that CDSC expects to gain revenue from its investment in Africlear by being able to charge for corporate actions such as reconciling investors on share splits, dividend declaration and payments. Revenues are particularly expected from international investors who mostly make the bulk of the traders on the Nairobi Securities Exchange.

Central Depository and Settlement Corporation (CDSC) Kenya is approved by the Capital Markets Authority of Kenya as provider of clearing and settlement services to the Kenyan capital markets. Central Securities Clearing System (CSCS) Nigeria is licensed by the Securities and Exchange Commission of Nigeria and serves as the clearing and settlement house for the Nigerian capital markets and The Nigerian Stock Exchange. Altree Financial Group is an integrated financial-services company licensed to conduct Investment Business by the Bermuda Monetary Authority.

The AfDB’s FAPA fund is a multi-donor thematic trust fund that provides grant funding for capacity building, seed capital and advisory services to support implementation of the Bank’s Private Sector Development Strategy. AfDB and the Governments of Japan and Austria have contributed to the fund, which to date has provided over $60m to 56 projects in 38 countries across Africa. The portfolio includes regional and national projects aimed at improving the business environment, strengthening financial systems, building private-sector infrastructure, promotion of trade and development of micro, small and medium enterprises

COMMENT – African nations seem keen on having national exchanges and central depositories under domestic regulation. However, they are working hard on harmonizing regulations, including to global standards, particularly within regional associations of regulators.

Africa is also looking for ways to increase links between the exchanges, eventually pushing to the point where a broker in one country can route orders to other exchanges, meaning that investors all over Africa have access to different exchanges, boosting liquidity and achieving more cross-border communications, trading, cross listings and remote memberships.

Africlear can be a key part of this. Getting post-trade “plumbing” for payments, clearing and settlement is key to ensuring African exchanges. Africlear is set to be an important step forward.

Dar es Salaam Africa’s top stock exchange to 31 Jan

Tanzania’s Dar es Salaam Stock Exchange topped the performance list for the 12 months to 31 January for USD investors, according to the data collected by Ryan Hoover’s excellent Investing in Africa website. It managed a 27% climb, including 3.8% in January. That beat the S&P 500 index which managed a strong 11.9%, despite increasing worries of pending bear markets and falling back to 30 Jan, although it has since gained.
Other African bourses which beat the S&P included Uganda Securities Exchange (up 18.3%), South Africa’s JSE (up 17.1%), Nairobi Securities Exchange (16.1%) and Namibian Stock Exchange (up 15%).

Source http://investinginafrica.net

Source http://investinginafrica.net


Hardly surprisingly, two of the worst performers were hit by the crashing oil price, including heavy falls in the currency compared to the soaraway USD. Nigeria was down 36.9% including 16.6% in January and Ghana down 32.1% including 8.3% in January. Weakness in the euro no doubt contributed to the poor performance of the BRVM, as the CFA currency is linked to the euro.

Graphic by www.africanbusinesscentral.com

Graphic by www.africanbusinesscentral.com


This picture, created by website AfricanBusinessCentral gives “volume”, which is normally defined as the number of shares traded, although I could not find the source data for this infographic so we welcome any clarifications. Better indications of exchange liquidity are often the value of shares traded and the number of transactions.

“Jeff” Otieno Odundo new head for Nairobi Securities Exchange

Geoffrey “Jeff” Otieno Odundo will be the Chief Executive of the Nairobi Securities Exchange (NSE), effective from 1 March 2015. The announcement was made yesterday (8 Jan) by the NSE Board of Directors.

Mr. Odundo is an accomplished investment banker with 22 years of experience in the financial sector experience including 16 years in the capital markets in various senior roles in asset management, corporate finance and stock broking, according to a press statement.

Geoffrey Otieno Odundo (credit Salaton Njau, Nation Media Group)

Geoffrey Otieno Odundo (credit Salaton Njau, Nation Media Group)

Leadership skills
Mr. Odundo has been Managing Director and CEO of Kingdom Securities Limited from June 2009. According to the statement: “During his tenure at Kingdom Securities Limited he has overseen the growth of the firm to become one of the leading trading participants of the NSE and has been instrumental in key listings on the NSE as well as other corporate finance transactions.”

According to a report in Business Daily NSE chairman Eddy Njoroge said the investment banker was appointed after a thorough vetting process: “The board together with KPMG considered numerous applications from various applicants of the highest standards”. He said Mr. Odundo’s leadership skills, experience and wealth of knowledge would be instrumental in driving the NSE’s strategic plan.

Capital FM quoted Mr Odundo as saying: “I am very confident that the future of the NSE as a key driver of Kenya’s economy is very bright as we deepen the current products and diversify into new product offering.”

He takes over from Peter Mwangi who left in November after serving two 3-year terms as CEO and became CEO of Old Mutual Kenya. Mr Njoroge also thanked Andrew Wachira, the Head of Compliance and Legal, who has been the Acting Chief Executive for the transition.

Leading stockbroker
Odundo has served as a Non-Executive Director of the NSE representing Trading Participants from March 2012. During this time, he has been the Chairman of the NSE Technology Committee and has also been a member of the NSE Finance and Manpower Committee and the NSE Listings and Admissions Committee.

Before moving to Kingdom Securities he was instrumental in setting up Co-op trust Investment Services and Co-op Consultancy Services Limited. Other roles include as a Director and Secretary of the Kenya Association of Stockbrokers and Investment Banks (KASIB), “a role in which he was instrumental in improving the service delivery and standards on the operations of Capital Markets intermediaries.” According to the statement.

Personal
Qualifications include a Bachelors of Arts Degree in Mathematics and Economics from Egerton University in Kenya (main campus Njoro near Nakuru) and a Masters in Strategic Management from the United States International University (Nairobi). He is married with 3 children and enjoys soccer, golf and Formula One. He is also a dedicated member of the St. Paul’s University Chapel Lectors Group and founder of Ame Foundation to support the less fortunate.

East African securities exchange integration – what’s on in 2015

Securities exchanges in East Africa are working together on the infrastructure for tighter cooperation and links between the capital markets of Rwanda, Kenya, Uganda and Tanzania and potentially Burundi. The body for cooperation is the East African Securities Exchanges Association (EASEA). The key integration driver is the Technical Working Group (TWG), which has a member from each State. It was established by the East African Community (EAC) to review the best infrastructure and legal framework to facilitate seamless cross-border movement of capital.

Training and qualifications
Also important is the Securities Industry Training Institute (SITI) East Africa, which is improving skills and technical capacity to international standards and creating regional qualifications to enable skilled candidates to work across the region. For 2015 SITI East Africa aims to help more market players and regulators have SITI certification and examinations and is driving training to meet the growing demand for expertise. SITI was set up in 2009 to establish a common curriculum. See this post about the launch of SITI.

Infrastructure
A regional inter-depository transfer mechanism is in place to support movement of cross-listed securities and provide possibilities for investors seeking cross-border trading and investment opportunities. It is part of a capital market infrastructure project progressing under the EAC Financial Sector Development Regional Project (FSDRP I). Each country is leading publicity and workshops to raise awareness and boost cross-border trading.

Backbone – new directives
The TWG is developing Council Directives “which will be the backbone of the proposed integration of the regional capital markets”, according to the communiqué (“EASEA Press Release”) of the last EASEA meeting. The directives under public discussion are:
1. Council Directive of the EAC on Central Securities Depository
2. Council Directive of the EAC on Securities Exchanges
3. Council Directive of the EAC on Self-Regulatory Organizations
4. Council Directive of the EAC on Conduct of Business for Market Intermediaries
5. Council Directive of the EAC on Corporate Governance for Listing Companies.

The TWG has also drafted and completed directives on
1. Council Directive of the EAC on Investor Compensation Schemes
2. Council Directive of the EAC on Financial Education and Consumer Protection
3. Council Directive of the EAC on Disaster Recovery for Capital Market Infrastructure
4. Council Directive of the EAC on Regulated Activities
5. Council Directive of the EAC on Credit-Rating Agencies
6. Council Directive of the EAC on Regulatory Authorities
7. Council Directive of the EAC on Anti-Money Laundering and Combating of Financial Terrorism

The last meeting of EASEA was 26-27 November and Tanzania did not attend. The next is due in Uganda in the Q2 of 2015. EASEA is a member of the Capital Markets Development Committee (CMDC) of the East African Community (EAC) – a committee of the East African Community Secretariat, according to the Uganda Securities Exchange website. The CMDC objectives include

  • Establish cross-listing of stocks, a rating system of listed companies and an index of trading performance to facilitate the negotiation and sale of shares within and external to the Community
  • Ensure unimpeded flow of capital within the Community by facilitating the removal of controls on the transfer of capital among the Partner States
  • Prevent money-laundering activities through the capital markets
  • Ensure that the citizens of and persons resident in a Partner State are allowed to acquire stocks, shares and other securities or to invest in enterprises in the other Partner States

Encourage cross-border trade in financial instruments.

Nairobi securities exchange prepares for derivatives market launch

The Nairobi Securities Exchange is pushing ahead with plans to launch a derivatives market, including preparing product and contract specifications, and public education and stakeholder engagement meetings.
This follows the news on 19 Dec that the Capital Markets Authority granted NSE a provisional licence to set up and operate a derivatives exchange and approved the NSE’s Derivatives Exchange Rules and related documentation.
According to a press release put out by the NSE, acting Chief Executive Andrew Wachira said: “The NSE will now establish a globally competitive derivatives exchange that will enable spot and futures trading of multi-asset classes including equities, currency, interest rate products as well as varied forms of agricultural commodities contracts. The exchange has invested in the development of the derivatives market to ensure that it will meet global standards including mechanisms for trading, clearing and settlement of the instruments traded.”
NSE’s derivatives market is modelled on the derivatives market at the Johannesburg Stock Exchange (JSE), which offers trading in futures and options on equities, bonds, indices, interest rates, currencies and commodities.
The latest move is in line with the strategic plan of the NSE. According to a report on Bloomberg earlier this year in February this envisages market capitalization soaring fourfold to KES 7.2 trillion ($79 billion) by 2023 from KES1.85 trillion.

Nairobi Securities Exchange (credit: Diana Ngila, Nation Media Group)

Nairobi Securities Exchange (credit: Diana Ngila, Nation Media Group)


NSE Chairman Eddy Njoroge noted in the press release: “Derivatives are among the most affordable and convenient means companies can cushion themselves against interest-rate fluctuations, exchange-rate volatility and commodity prices. Derivatives also boost liquidity in the underlying assets. The establishment of a derivatives market is a step towards growing the NSE brand and shareholder value and is also in line with Kenya’s Vision 2030 of deepening our Capital Markets and making Nairobi the financial services hub of East Africa.”
According to Bloomberg, a system for trading derivatives has already been installed. The law to allow creation of the futures market was passed in Dec 2013 and rules were submitted for approval by mid-February.
“Derivatives” get their name because their value is derived from another asset class such as a share, a physical commodity or an index. The JSE was ranked the 6th largest exchange by the number of single stock futures traded and 9th by the number of currency derivatives traded in 2012 in the World Federation of Exchanges Annual Derivatives Market Survey, according to the press release.

4 priorities from new head of African stock exchanges

Nairobi Securities Exchange (credit: Diana Ngila, Nation Media Group)

Nairobi Securities Exchange (credit: Diana Ngila, Nation Media Group)

The new President of the African Securities Exchanges Association (ASEA) put forward 4 strategic objectives for the member bourses. Oscar Onyema, CEO of the Nigerian Stock Exchange, was elected President after outstanding leadership by Sunil Benimadhu, Chief Executive of the Stock Exchange of Mauritius.
According to a news report in Nigeria’s This Day, Onyema said the vision is to support the effective mobilization of capital for economic development. The new executive committee to lead African securities exchanges will focus on
• Strengthen ASEA’s governance, financial and reporting framework
• Promote the sustainable development of African capital markets
• Facilitate an increase in market access at the regional level, and promote cross-listing among African exchanges
• Align the goals of African capital markets with those of the African Development Bank (AfDB).
Onyema said: “I am honoured to be elected president of ASEA which is the largest platform for Africa’s stock, futures and options exchanges. I would like to thank the outgoing Executive Committee led by Mr. Benimadhu for their stewardship of the Association over the last two years, and I look forward to working with ASEA members, our global counterparts and regulators to contribute to the association’s rich legacy, as well as to promoting our markets in a broad range of areas”.
He was elected this week at the Executive Committee meeting of ASEA after its 18th annual general meeting held in Diani, Kenya.

Exchanges and regional integration
According to this press release from Nairobi Securities Exchange, William Ruto Deputy President of Kenya opened the ASEA flagship conference: “Well-established capital markets can help African countries lessen vulnerability of their economies to external shocks, by locally marshalling funds through instruments such as bonds and reducing currency and duration mismatches.
“The exchanges have continued to foster regional integration by allowing cross-border capital raising initiatives such as public offers, bond issues and cross-listing of stocks”. He encouraged Kenyans to keep saving and to do this using the capital markets.
Benimadhu, the out-going ASEA president, welcomed the new president and committee members: “We look forward to ASEA’s continuing progress as it seeks to enhance the global competitiveness of member exchanges”.

Open up, urges investor
Allan Thomson, managing director of Dreadnought Capital, based in Johannesburg, South Africa, was reported in Kenya’s Daily Nation that opening up the markets to foreign investors would bring in much needed capital and training for the local markets: “I have respect for regulators in Africa and what they are trying to do. But it is worrying. African capital markets suffer from too much protectionism and stringent rules. The fact is that protected and inaccessible markets remain small.”
He added that membership at most capital markets was expensive, which kept away potential investors: “I once approached a securities exchange in Africa and was told to pay $1 million to become a member yet they were only five. I suggest a zero membership fee because investors bring in skills and capital,” he added.

Diani, Kenya (credit www.planetwindsurfholidays.com)

Diani, Kenya (credit www.planetwindsurfholidays.com)

Nairobi SE appoints Andrew Wachira as acting CEO

The Board of Directors of the Nairobi Securities Exchange appointed Andrew Wachira as the Acting CEO of the exchange, effective from 1 Oct 2014. Peter Mwangi left on 30 Sept, as reported on this blog. The process to recruit a permanent Chief Executive is ongoing.
According to the NSE announcement, lawyer Mr. Wachira has over 10 years’ experience at the Nairobi exchange. He has been the Head of Compliance and Legal Department, NSE since 2009. He has a Bachelor of Law Degree from the University of Nairobi and is an Advocate of the High Court of Kenya. He is a member of the Law Society of Kenya.
Board Chairman Mr. Eddy Njoroge said: “Andrew has been instrumental in the implementation of a number of key initiatives at the exchange. His experience, leadership skills and wealth of knowledge will ensure a smooth transition for the exchange. As we formalise the substantive recruitment of a Chief Executive, we are confident that he will execute this interim position commendably.”

History pic - Nairobi SE in 2009 (credit www.businessdailyafrica.com)

History pic – Nairobi SE in 2009 (credit www.businessdailyafrica.com)