Privatization of Nairobi Stock Exchange

Kenya is considering speeding up plans to privatize the Nairobi Stock Exchange (www.nse.co.ke), the biggest market in East Africa. The aim is initially that stockbrokers would acquire the large majority of the shares.

The NSE is already relatively advanced, with an Automated Trading System that also handles bonds. It is linked to the central depositories of the Central Depository and Settlement Corporation (CDSC) and the Central Bank of Kenya (CBK), which could lead to automated trading of treasury bills and other debt instruments.

Kenya’s Finance Permanent Secretary Joseph Kinyua was reported in local media recently as saying privatization could come earlier than expected as the Government moves to improve the country’s capital markets. First step would be to turn the stock exchange into a company via demutualization, separating its ownership from management to foster transparency.

Previously investor confidence had been hit by collapse of a number of some stockbroker firms, but regulators and others have since been taking some action.

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