New rules to help SMEs list at the bourse

Listing of small and medium sized firms at the Nairobi Securities Exchange moved closer to reality with the gazettement of new regulations.

According to Nairobi Securities Exchange (NSE) chief executive officer Peter Mwangi, the new rules will offer small and medium sized companies an opportunity to access long-term and relatively cheap capital, as well as raise their profiles through participation at the NSE.

This also follows the approval of Nominated Advisors (Nomads) rules and the NSE’s training of prospective advisors on their roles and responsibilities to clients ahead of the listing. The Nomads will assist firms to list and to comply with good corporate governance practices.

“In addition, we shall offer a course on corporate governance to directors of mid cap companies. This will reassure investors who are looking to invest in fast growing, well run, small companies,” Mr Mwangi said.

Capital Markets Authority acting chief executive officer Paul Muthaura said they would train at least 50 market intermediaries in the next 100 days in a new programme.

The NSE is also seeking regulatory approval to allow it to list on the bourse by mid next year. Already, its shareholders have approved the listing through introduction on the bourse on the Alternative Investment Market Segment.

“The Capital Markets Authority gazetted the demutualisation regulations in August. We will now make a formal application, as required by the regulations,” Mr Mwangi said.

Also, starting October 3, NSE and FTSE International will introduce FTSE NSE Treasury Bond Index, which will allow investors, for the first time, to use an independent benchmark to measure the performance of their bond portfolios.

This new initiative will give investors an opportunity to access current information and will provide a reliable indication of Kenya Government bond market performance.

The FTSE NSE Treasury Bond Index is built according to FTSE’s standards of index design, which emphasis transparency, tradability and strong governance, with index data available across a range of global vendor platforms.

The officials were speaking during the listing of Diamond Trust Bank’s new shares following the completion of a rights issue in which the bank was seeking to raise Sh1.8 billion to fund its expansion strategy in Kenya and its subsidiaries in East Africa.

The bank will also use the funds to explore new investment opportunities in other countries in sub-Sahara Africa.

The bank received applications worth Sh3.37 billion, 86 per cent more than the Sh1.8 billion it was seeking to raise.