Investors in Nairobi may in coming years begin to trade in securities in other three top exchanges in Africa without opening an additional account under a plan to link markets in Kenya, South Africa, Nigeria and Morocco.
Nairobi Securities Exchange CEO Geoffrey Odundo said the pilot project, spearheaded by African Securities Exchanges Association, will give investors exposure in other countries through existing brokers and accounts.
“If that integration works, then a broker from Kenya will directly buy a stock in Nigeria for you and hold them here in Kenya,” he said. “Currently, if you want to buy a stock in Nigeria, you must have a broker in Nigeria to buy them for you and that again will be held in Nigeria.”
“We are at a very nascent stage. We hope to go for a consultative meeting to see just how far [the technical] team has gone in terms of a technical discussion. There’s activity going on behind the scenes, but there is no firm date yet,” Odundo said.
A similar move to integrate the East African Community’s exchanges – NSE, Uganda Securities Exchange, Dar es Salaam Stock Exchange and Rwanda Stock Exchange – has been been delayed over disagreement on the procurement of trading infrastructure.
Odundo spoke after the NSE reported net profit for 2015 fell by 4.52 per cent to Sh305.59 million on reduced trading activity due to capital gains tax in the first quarter and increased interest in the second half of last year.
Total earnings were flat, declining by 1.66 per cent to Sh808.26 million, while administrative costs rose 15.09 per cent following a corporate reorganisation that led to hiring more staff.
The NSE has proposed a bonus share of one for every three held on top of a Sh0.49 dividend from last year’s Sh0.38 per unit subject to shareholders’ approval.
Its share price rose 8.42 per cent to Sh25.75
