Kenya has suspended a plan to cross-list its $2 billion Eurobond on the Nairobi Securities Exchange until foreign investors are allowed to trade in shares and bonds directly without intervention by local stockbrokers.
The East African has learnt that despite introducing a trading platform for foreign-currency-denominated bonds, the Nairobi bourse has not implemented key reforms necessary for the cross-listing of the sovereign bond, which is currently trading on the Irish Stock Exchange (ISE).
Government sources said cross-listing the sovereign bond has been put on hold until capital markets regulators implement changes that will give international investors direct access to the NSE’s automated trading system.
Currently, buyers have to contact stockbrokers to give their buy/sell orders, a process that is time-consuming, inefficient, less than transparent, costly and prone to errors associated with manual entries by stockbrokers.
Under the Direct Market Access (DMA) facility, investors will place their buy/sell orders directly with the NSE’s trading system using the stockbrokers’ infrastructure.
The ISE said cross-listing of the bond is a matter to do with the Kenyan government (issuer) and the NSE.
“The issuer would need to meet the rules of the NSE, which is separate from our own listing process, so it is a matter for the NSE,” said Byrne Ailish, head of public affairs and communications at ISE.
CMA chief executive Paul Muthaura and NSE boss Geoffrey Odundo declined to comment on the matter.
“Talk to NSE, they are the ones implementing these reforms,” said Mr Muthaura.
“I’ll get back to you,” said Mr Odundo.
