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AFRICAN TRADE EXHIBITION |
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| Kenya: |
Kenya’s Capital Market is expanding and is gradually attaining in terms of available securities and
market players. Currently there are 56 companies that are publicly quoted on the Nairobi Stock
Exchange, which is one of the oldest exchanges in Africa.
The Capital Markets Authority was created in 1989 to oversee the development of the Capital
Markets in Kenya. Since then, the Nairobi Stock Exchange has been restructured and the open-outcry
trading system adopted in conformity with other emerging markets. Seven more brokers
have been licensed by the Authority and admitted as Members at the Nairobi Stock Exchange
bringing the total number of brokers to thirteen. It is the intention of the Authority to license
additional brokers in 1995.
Investment advisory services are now also available. To encourage
market growth and participation of investors in Capital Market Instruments, the Government has
undertaken major financial restructuring, encompassing removal of exchange controls, floatation of
the Kenya shilling, abolition of stamp duty on listed securities and the treatment of withholding tax
on dividends and interest payments as a final tax. Share traded at the Nairobi Stock Exchange have
increased over the last three years as follows:
| Year |
Shares Traded |
Value (Kshs) |
| |
|
|
| |
|
|
1992
|
15 million |
385 million |
1993
|
27 million |
837 million |
1994
(6th months to June 1994)
|
16.6 million |
1.5 billion |
Similarly, the market capitalization increased from Kshs. 72 billion in December 1993 to Kshs.
185.6 billion in October 1994. The participation of foreign portfolio investment in the capital markets is
now actively being considered. In this regard, appropriate guidelines including rules and
procedures are being discussed. As a first step in this process, the Government authorized limited
participation in the Firestone (EA) Limited public sale of 40 million shares in September 1994.
The development of custodian and underwriting services are also being encouraged in the market.
These services are currently available from the main commercial banks.
