Government urged to tap into Capital Markets
27 August 2014, 09:20
Nairobi - The Nairobi
Securities Exchange (NSE) on Tuesday urged the Kenyan government to tap
the capital markets in order to finance infrastructure projects.
NSE Chairman Edward Njoroge told an investor's forum in Nairobi the
capital markets are a sustainable source for long term finance.
"Tax revenues are not adequate to finance the growing infrastructure
needs," Njoroge said during the listing of Diamond Trust Bank's (DTB)
new shares at the NSE. The bank raised 41 million U.S. dollars through a
He said public sector reforms have made the government, an attractive client for the financial sector.
"The increased attempt by listed companies to raise fresh funds
through the security exchange indicates that the primary segment of the
capital market has picked up," Njoroge said.
The chairman said the NSE is currently undergoing reforms in order to
expand Kenya's financial sector. "Our long term objective is to
position Kenya as the financial services hub of the East African
region," he said.
The NSE has demutualized and will be listed on the securities
exchange in September in order to increase transparency and corporate
In Africa, the only other exchange that has demutualized is South Africa's Johannesburg Stock Exchange.
DTB Chairman Abdul Samji said that there is great demand from
domestic and international investors for opportunities in Kenya's
"Investors are willing to pay a premium for shares in company that they trust," Samji said.
Capital Markets Authority Director Edwin Njamura said that since 2010
only seven listed firms have raised money through a rights issue.
"Good governance lays the basis for the ease to access to affordable
financing as well as stable macro economic conditions," he said.
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