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Kenya's stock exchange eyes boost from rate cap removal

The chief executive of Kenya's stock exchange says he believes 2020 will be a positive year, with the removal of a government cap on commercial lending expected to spur stocks trading, lift valuations, and attract new listings.

In an interview with Reuters on Monday (January 13), Geoffrey Odundo, head of the Nairobi Securities Exchange, said investors would potentially shift from fixed-income into stocks.


"We provide a more affordable opportunity for raising money because banks now have got a free opportunity to lend at new rates that they desire, and so investors are likely to look at equity as an alternative to tap into, or to raise capital to run their businesses."

Kenya's stock exchange is a key entry point for foreign investors seeking exposure to East Africa's fast-growing economies.

But despite being the fifth-largest on the continent, the number of companies listed on the bourse have remained at around 65 for many years, with a combined worth of $24.6 billion.

It's since been trying to change that, with an incubator program launched in December 2018 to prepare young firms for eventual listing or bond issuance.

Odundo said 24 companies had so far been admitted onto the platform.