CAPITAL MARKETS | AFRICAN EQUITY
Initial public offerings on the Nairobi Securities Exchange have been few and far between in recent years. The exchange had a successful IPO in September, however, when it offered a 31% stake in itself to the public. The shares nearly doubled in value in their first day of trading, ending with a gain of 83%.
With a market capitalization of about $22.6 billion, the Nairobi Securities Exchange is the third-largest exchange in sub-Saharan Africa, following the markets in South Africa and Nigeria. The operator of Kenya’s stock market plans to use the IPO proceeds to pay off its mortgage and to upgrade its automated trading system to handle new products, such as real-estate investment trusts, exchange-traded funds, currency futures and a commodities exchange.
The Nairobi Securities Exchange, which was previously owned by its 22 trading participants, is also considering expanding to Somalia, South Sudan, the Democratic Republic of Congo and Burundi to diversify its revenue. None of these countries currently has an exchange.
The Kenyan exchange, which trades 62 stocks, is also hoping for some more IPOs soon in its own market, where the government plans to privatize some sugar producers and banks.
