July 23, 2014 / 1:16 PM / 3 years ago

Kenya's stock exchange prices IPO, plans derivatives market

NAIROBI, July 23 (Reuters) - Kenya’s securities market priced shares in its initial public offering at 9.50 shillings ($0.11) on Wednesday, saying it planned a new derivatives market, as it opened up to non-brokers for the first time in 60 years.

The Nairobi Securities Exchange (NSE) is used as an entry point into east Africa by foreign investors seeking exposure to fast-growing economies in the region. Several Kenyan firms are cross-listed on neighbouring bourses.

The business, which was until this year mainly owned by brokers who paid for a membership in the mutual company that ran the market, hopes the listing will enhance transparency and provide funds for new investments.

The Kenyan government owns a small stake.

It plans to invest the 627 million shillings raised, if the offer is fully subscribed, in rolling out new products including a derivatives market, offering futures and options.

Referring to new products in the IPO prospectus, NSE Chief Executive Officer Peter Mwangi said: “Individuals and companies can cushion themselves against interest rate fluctuations, exchange rate volatility, and commodity price changes while boosting liquidity in the underlying assets.”

Investors in the issue, which will be open from July 24-Aug. 12, will be offered about 31 percent of the NSE’s 212.5 million authorised shares.

The NSE has assets of 1.4 billion shillings and reported a pretax profit of 379 million shillings last year. It had more than 120 listed equities and bonds at the end of last year.

The market capitalisation for all shares and bonds listed on the market stood at about 2.7 trillion shillings ($30.75 billion) at the end of 2013. ($1 = 87.8000 Kenyan shillings) (Editing by Edmund Blair and Susan Fenton)

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