Nairobi Securities Exchange
|Nairobi Securities Exchange
|1954 by incorporation
|Chief Executive Peter Mwangi; Chairman James Wangunyu
|Listed Equities, Preference Shares, Corporate And Government Bonds
The Nairobi Stock Exchange (NSE), now the Nairobi Securities Exchange, is the only exchange in Kenya trading listed equities and is one of the largest in sub-Saharan Africa. It was a private operation until 1991 but in 1994 allowed investors to open and settle electronic accounts and trade regular hours. The NSE has been regulated since 1989 and now lists fixed-income securities and small-cap shares as well as cross-listing equities with neighboring bourses.
The NSE began operating as an informal market for Europeans only in the 1920s but became a corporation in 1954 and nine years later allowed Kenyan natives to join the market and trade. It began functioning more formally in 1989 when its regulator, the Capital Markets Authority of Kenya (CMA), was officially established. In 1991 the NSE introduced an open-outcry system of trading and in 1995 relaxed restrictions on foreign ownership of listed companies. The following year marked the NSE's largest-ever issue of 235,423,896 shares of newly-privatized Kenya Airways at 11.25 Kenyan shillings per share.
Since then the NSE has grown to become the continent's fourth-largest exchange by trading volume and fifth largest by market capitalization as a percentage of GDP. It cross-lists some of its equities - most notably Kenya Airways - with neighboring East African bourses the Uganda Securities Exchange and the Dar es Salaam Stock Exchange in Tanzania.
In 2014, NSE listed its shares for trading and in September of 2014 was added as a constituent of the FTSE Mondo Visione Exchanges Index, the first Index in the world to focus on listed exchanges and other trading venues.
In 2001, the market at the NSE was split into the Main Investment Market Segment (MIMS), Alternate Investment Market Segment (AIMS) and the Fixed Income Securities Market Segment (FISMS).
As of October 2008, investors on the NSE lost about 40% of their capital compared to a year earlier, although not all was directly related to the corresponding global credit crisis and financial markets meltdown. Recent analysis shows that the NSE was already in decline early in 2008 following the collapse of Nyaga Stockbrokers, one year after the collapse of another retail-based brokerage, Francis Thuo & Partners.
NSE is a member of Association of Futures Markets (AFM), having been admitted to membership in 2013. It is a member of a member the African Securities Exchanges Association (ASEA) and the East African Securities Exchanges Association (EASEA). It is an affiliate member of the World Federation of Exchanges (WFE), and a partner Exchange in the United Nations Sustainable Stock Exchanges Initiative (SSE).
In 2011, NSE and FTSE International launched the FTSE NSE Kenya 15 and FTSE NSE Kenya 25 Indices.
The NSE had developed two benchmark indexes to measure the performance of its listed equities: the long-established NSE 20 Share Index (NSE-20) and the more recent NSE All Share Index (NASI). The NSE-20 was introduced in 1964 to measure the performance of the 20 best performing blue chip listings and has been altered over time to reflect market changes. The NASI was introduced in 2008 to capture the overall market and is calculated using all shares traded on a single day. Today's NSE contains three listing sectors: Main Investment Market Segment (MIMS) for larger listed companies, Alternative Investment Market Segment (AIMS) for smaller OTC issues and Fixed Income Securities Market Segment (FISMS) for corporate bonds.
- Geoffrey Odundo - Chief Executive
- Lina Ng’inja, Acting Business Development & Commercial Director
- Terrence Adembesa, Derivatives Market Director
- Kuria Waithaka, Legal & Corporate Affairs Director
- Jane Kiarie, Finance & Administration Director
- Caleb Kivuva, Operations & Technology Director
- Tom Kimaru, Regulatory Affairs Director
- Mr. Samuel Kimani, Chairman
Formerly, Peter Mwangi was appointed was chief executive. He was appointed in November 2008, one month after predecessor Chris Mwebesa resigned the position. Mwangi was formerly managing director of Centum Investment, a listed company formerly part of Kenyan government-lending agency the ICDC that invests on its own account in other listed East African equities.
Also formerly, James Wangunyu was NSE Chairman. He is a graduate of George Washington University and was also chairman and managing director of Standard Investment Bank Limited.