The Capital Markets Authority (CMA) is considering lowering fees for listing on the Nairobi Securities Exchange (NSE) to attract more investors.
This comes after a study by investment adviser RisCura which showed that prohibitive costs had led to “market failure” relating to Initial Public Offerings (IPOs) on African stock exchanges.
Currently, the initial and annual fees charged on the NSE Main Investment Market Segment is 0.06 per cent of the market capitalization subject to a minimum of Kes 200,000 and a maximum of Kes1.5 million.
Consequently, 0.06 per cent of the securities’ value to be listed subject to a minimum of Kes 100,000 and a maximum of Kes1,000,000 is charged as initial fees on those seeking to list in the alternative Investment Market Segment.
Speaking during the media briefing for the Capital Markets Soundness Report for Quarter One 2021, the Capital Markets Authority (CMA) Chief Executive Officer, Mr Wyckliffe Shamiah, disclosed CMA would be engaging the National Treasury & Planning for consideration of guidelines for issuance of County Bonds to support County Bond program on the back of a growing interest from counties such as Laikipia to leverage the capital market to finance key projects.
During the Media briefing, the regulatory expressed optimism in the performance of the market despite the prevailing COVID-19 Pandemic.
‘’There is focused implementation of the Post Covid-19 Capital Markets Recovery Strategy to harness the unique advantage of the capital market especially in playing a facilitative role in promoting the uptake of capital market products and additional listings’’ Mr Wyckliffe Shamiah.
However, despite the optimism, COVID-19 still posed risks around socio-economic disruption and its likely dampening of capital markets activity and the sustainability of regulated entities in a period of sustained erosion of their incomes.
The regulator said on the domestic front, market infrastructure remained resilient, with the Nairobi Securities Exchange transitioning to a new brokers network in February 2021.
The Securities exchange is also integrating its bond system with Refinitiv’s Fixed Income Call Outs Application. These solutions enhanced the robustness of the trading infrastructure, building on the resilience of the local capital markets given the advances in network security, efficiency and stability.