Kenya's stock exchange targets cross listings to end drought
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TLDR
- Nairobi Securities Exchange (NSE) aims for first stock listing since 2020, planning at least five new trading debuts in 2024.
- New CEO Frank Mwiti targets real estate investment trusts, ETFs, and equity offerings for potential issuers.
- NSE plans to offer international investors access to growing sectors like technology, finance, and consumer goods through cross-listing regional companies.
The Nairobi Securities Exchange (NSE) aims to secure its first stock listing since 2020 this year, supported by a rebound in shares after a two-year decline that cut the main index by over 50% and deterred new listings. Its all-share index is Africa’s second top performer this year.
The NSE targets at least five new trading debuts in 2024, including real estate investment trusts, exchange-traded funds, and equity offerings, according to Frank Mwiti, the newly appointed CEO. The exchange is in discussions with several potential issuers, including private equity funds and family-owned businesses.
In its 2023 annual report, the bourse indicated plans to offer international investors access to the region's growing economy and sectors such as technology, finance, and consumer goods through cross-listing regional companies.
Key Takeaways
Companies typically cross-list shares to access more capital and a wider pool of investors than available on a single exchange. However, the Nairobi Securities Exchange (NSE) has only two cross-listed firms: Umeme Ltd from the Uganda Securities Exchange (USE) and Bank of Kigali (BoK) from the Rwanda Stock Exchange (RSE). While cross-listing can enhance a company's visibility and expand its investor base, low or no trading activity has made companies hesitant to issue shares in new markets. For example, Kenya's investment firm Centum abandoned plans to cross-list on the RSE and the Dar es Salaam Stock Exchange (DSE) in 2016, citing the lack of liquidity in its cross-listed shares in Uganda.
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