The Nairobi Securities Exchange (NSE) IPO

kenya1The process of self-listing for the Nairobi Securities Exchange will kick off on July 24 2014 and close on August 12 2014. This will give investors a three weeks window to subscribe to the NSE IPO that is the culmination of its long demutualization journey. The IPO share price is set at ksh.9.5, with a minimum purchase of 500 shares. Hence one only needs ksh.4750 to get a slice of the just baked NSE cake.

With 66 million shares on sale to the public, NSE expects to raise ksh.625 million from the debut which they have given a subscription target success rate of 68.8%. Analysts view the NSE as a low risk-low return investment that may not elicit excitement form the aggressive investors. However, due to its low pricing, risk averse and risk neutral retail investors are expected to rake into it.

Self-listing of the NSE will convert it to a public limited company, a process referred to as demutualization. Previously, the exchange was co-owned and managed by the stock brokers who trade on the floor of the house.

The process of demutualization has been long coming with tussles between the current stoke brokers at the exchange, the former founder stoke brokers and the government having derailed the process. After the demutualization, transparency and accountability is expected to improve at the exchange and unlock its potential to offer more product lines within the capital markets.

In the recent years NSE has seen a lot of improvements in its operations with the introduction of the electronic trading platform. The exchange also moved to its new offices in Westlands and has plans to venture into other countries and establish securities exchanges there. Among the countries identified are Somalia and South Sudan.


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