Kenya invites Ethiopian firms to raise funds through Nairobi bourse
NAIROBI, March 12
NAIROBI, March 12 (Reuters) - Kenya has offered Ethiopian companies a chance to raise funds and trade their shares on the Nairobi bourse in a move that could give them access to capital without compromising Addis Ababa's closed economy policy.
The Nairobi Securities Exchange plays a key role in the region by dual-listing shares of companies already listed in neighbouring Uganda. In 2012 the bourse offered to help start a Somali stock exchange but the plan never materialised.
"Kenya stands ready to begin consultations for the regulations and guidelines that would allow Ethiopian companies to raise investment capital and trade at our Nairobi Securities Exchange," President Uhuru Kenyatta told a joint meeting of executives from both nations in the Ethiopian capital.
Ethiopia, whose largest firms like Ethio Telecom and Ethiopian Airlines are owned by the state, is widely coveted by regional firms because it has one of Africa's fastest growing economies and a large consumer base of more than 80 million people.
So far the Addis Ababa government has largely rejected calls to privatise state-owned sectors and liberalise the economy to speed up growth which stood at 9.7 percent in the fiscal year 2012/2013.
"We are enthused by the possibilities for joint ventures between our business, and particularly by the potential for cross-listing on regional bourses," Kenyatta said.
His delegation to Ethiopia includes executives of Kenyan firms like dairy company Brookside, associated with his family, Equity Bank and telecoms operator Safaricom.
Ethiopia and Kenya, which share a common border, signed a special status agreement in 2012, detailing various areas of co-operation in trade, energy and infrastructure.
Analysts said Ethiopia would benefit if its firms take up the offer to tap Kenyan capital markets.
"The advantage for Ethiopia for this arrangement would be the ability to provide companies with an inflow of capital without necessarily running the risks of an open capital account economy which Kenya is already accustomed to," Nairobi-based Standard Investment Bank said in a note to clients.
Kenya exported goods worth $53.2 million to Ethiopia in 2012 and imported goods worth $4.1 million in the same year, Kenyatta said.
Kenyatta's four-day tour of Ethiopia is his second state visit, after China last August, since he took office last April. (Reporting by Duncan Miriri; Editing by Drazen Jorgic and Stephen Powell)
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