Rules to help SMEs list at the NSE

SMEs will soon be able to list in the NSE

The earlier proposal that sought to have (small and medium enterprises)SMEs listed on the Nairobi Securities Exchange (NSE)   moved closer to fruition with the gazettement of new policies.

A message from the Nairobi Securities Exchange chief executive officer Peter Mwangi, revealed that the new rules will offer small and medium sized companies a platform to access long-term and relatively cheap capital. SMEs will also be able to raise their profiles through their participation at the NSE.

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

The acting CEO, Capital Markets Authority acting Mr. Paul Muthaura revealed that they are looking forward to training at least 50 market intermediaries in the next 100 days in a new programme.

Mr. Mwangi also said that they will also offer lessons on corporate governance to directors of mid cap companies.  They are doing this so as to reassure investors seeking to invest in the fast growing and well run small companies.

The NSE is in the hunt for regulatory approval that will allow it to list on the bourse by mid next year. Its shareholders have already approved the listing through the introduction of the bourse to the Alternative Investment Market Segment.

Mr. Mwangi further said that the Capital Markets Authority gazetted the demutualization regulations in August and that they are now making a formal application, as required by the regulations.

Starting October 3, the NSE and FTSE International will be introducing FTSE NSE Treasury Bond Index that will allow investors to use an independent benchmark for the first time to measure their bond portfolios performance.

This new program gives investors the opportunity to access current information and provide a reliable indication of the Kenya Government bond market performance.

The NSE officials were speaking during the Diamond Trust Bank’s listing of new shares following the completion of a rights issue where the bank sought to raise Sh1.8 billion to fund its expansion plan in East Africa. The bank will use the funds to explore alternative investment opportunities sub-Sahara Africa.