Kenya bourse eyes five new listings

Kenya's Nairobi Stock Exchange expects five new listings this year as firms are attracted by the chance of raising capital on the back of last year's stock market advance, its chief executive said.
The bourse was the second top gainer in Africa last year after Uganda. Its benchmark NSE-20 share index rose 37 percent to close at 4,432.40 points - outperforming the MSCI Frontier Markets index which rose 19 percent.
"As the market recovers and the index approaches 5,000 (points), there are more and more issuers who are likely to come to the market," Peter Mwangi told Reuters. "We are targeting five companies for listing. We are also targeting five companies for debt security issuance and also a regional IPO, from outside of Kenya." He did not name the companies in question.
Like other frontier markets, the NSE has been attracting higher offshore investments as investors chase risky but high-yielding assets. Overseas investment in the Kenya bourse jumped 156 percent last year to 59 billion shillings ($730 million), or more than half of total turnover for the year of 110 billion shillings.
Mwangi attributed the increased foreign investor participation to several factors including the enactment of a new constitution in August, which envisages far-reaching reforms that may lower political risk and spur economic growth.
"I'm optimistic that the momentum we built last year will be carried into this year because the political reforms are ongoing and they are quite fundamental, economic growth is accelerating, regional integration is also picking up steam," he said.
"I expect as we go into the earnings season in March ... you will see that companies are more profitable and that should all serve to boost the market."
Retail investors have also been returning to the market, pleased by moves to address a crisis of confidence in the bourse that followed the collapse of two brokerages in 2008 and 2009.
"We will not see a relapse of those unfortunate events. There are enough safeguards," Mwangi said, citing measures such as increased capitalisation of brokerages and investment banks.
He said a slow global recovery as the euro zone struggles with a sovereign debt crisis could offer both challenges and opportunities to markets such as the NSE in 2011.