The government is betting on tax cuts, wooing pension funds into trading and upgrading of the trading platform to allow for short selling to increase listings on the Nairobi Securities Exchange.
According to NSE CEO Geoffrey Odundo, this will increase traded capital making the bourse more vibrant and in the process enhance better valuation for listed companies.
Over 60 percent of Kenya’s securities market is dominated by foreign investors which according to experts leaves the bourse vulnerable to global shocks.
To increase the number of local investors, NSE CEO Geoffrey Odundo says they are looking into among others wooing the 12.6 billion shillings worth fund assets held by pension funds into trading and incentivizing local issuers via tax cuts.
The governments recently did gazette the Securities Lending, Borrowing and Short-Selling Regulations 2017 allowing short selling as well as securities lending and borrowing, which will be possible as from the second quarter of this year.
Kenya’s long awaited dive into the derivatives market is expected to happen this year, which in addition to the ongoing efforts to link Kenya with other six African markets comprising Nigeria, South Africa, Morocco, Egypt and Mauritius is expected to increase activity at the Nairobi Securities Exchange.
They were speaking during the launch of the inaugural Africa financial markets index report by Barclays Bank that ranks Kenya’s financial markets as the most advanced in the East African region and fifth in Africa ahead of economic giants like Nigeria, Ghana and Egypt.