NSE-Web-Prospectus-2014

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Chief Executive’s Statement which individuals and companies can cushion themselves against interest rate fluctuations, exchange rate volatility, and commodity price changes while boosting liquidity in the underlying assets. We believe that a more liquid market will attract more capital, which can finance Kenya’s Vision 2030 ambitions and support East African businesses. Going forward, NSE will need to balance the new ”for-profit” and “revenue diversification” motives of its shareholders and the continuing demands of all other stakeholders. As the regional and domestic economies continue to expand, the NSE as the leading regional stock exchange can only grow. The financial performance of the bourse will be driven by increases in the GDP growth rate, the market capitalization to GDP ratio, as well as equity and bond turnover ratios. I look forward to welcoming you as a shareholder of the NSE. Dear Investor, On behalf of the management and staff of the NSE, I would like to congratulate all our stakeholders on this Offer and Self-Listing. I also extend a warm invitation to all investors to take advantage of this opportunity to become part owners of the Exchange. Mr. Peter Mwangi Chief Executive Over the years the company has grown and now has total assets of Kshs 1.14 billion (USD 13.16 million). This includes the value of its five-storey building at 55 Westlands Road, Nairobi the location of the new NSE headquarters, “The EXchange”. The business generated a profit before taxation of Kshs 379 million (USD 4.37 million) for the full year ending 31 December 2013. The NSE declared a dividend of Kshs 49 million for the full year ending 31 December 2013 which was double that for the previous year. We have high expectations for the year 2014 and beyond. We have already embarked on several initiatives that will significantly grow and develop the market over the next 12 to 18 months. These are categorized as Equity Capital Market Initiatives, Debt Capital Market Initiatives, New Market Initiatives and Miscellaneous Initiatives and are detailed in Section 9 of this Prospectus under Future Outlook. 12 In particular, the NSE has invested in a state-of-the-art system, in partnership with technology and market specialists, to establish a world class derivatives exchange. This will facilitate the trading of futures and options which are among the most cost-effective and convenient means through
Section 1 Corporate Directory 1.1 Country of Incorporation: The Nairobi Securities Exchange Limited is incorporated in Kenya under the Companies Act (Chapter 486 of the Laws of Kenya) as a public company limited by shares 1.2 Date of Incorporation: 29 November 1990 1.3 Company number: CPU/2014/144920 1.4 Registered/Head Office L.R. No 209/18851 The EXchange, 55 Westlands Road P O Box 43633 - 00100 Nairobi, Kenya 1.5 Share Capital The authorised share capital of NSE is Kshs 850,000,000/- divided into 212,500,000 ordinary shares with a par value Kshs 4.00 each. The issued and fully paid up share capital of NSE is Kshs 514,500,000 divided into 128,625,000 ordinary shares with a par value Kshs 4.00 each. The unissued share capital of NSE is Kshs 335,500,000 divided into 83,875,000 ordinary shares with a par value of Kshs. 4.00 each. The recent alterations to the share capital of the NSE are set out in Section 13.1 and 13.2 below. 1.6 Financial Calendar Year end of 31 December and therefore half year end of 30 June 1.7 Website www.nse.co.ke 1.8 PIN No P000606858H 1.9 Shareholders a) The shareholders of the NSE at the date of this Prospectus are set out in Table 1.1 below and include the Trading Participants, the Cabinet Secretary, Treasury of Kenya and the Investor Compensation Fund Board. b) Refer to Section 13.2 below on the changes in the shareholding in the NSE in the last two financial years. Table 1.1-Shareholders No Name No of Shares % 1 ABC Capital Ltd 5,250,000 4.08 2 African Alliance Kenya Investment Bank Ltd 5,250,000 4.08 3 AIB Capital Ltd 5,250,000 4.08 4 Apex Africa Capital Ltd 5,250,000 4.08 5 SBG Securities Ltd 5,250,000 4.08 6 Discount Securities Ltd (under statutory management) 5,250,000 4.08 7 Dyer & Blair Investment Bank Ltd 5,250,000 4.08 8 Faida Investment Bank Ltd 5,250,000 4.08 9 Francis Drummond & Company Ltd 5,250,000 4.08 10 Genghis Capital Ltd 5,250,000 4.08 11 Kestrel Capital (East Africa) Ltd 5,250,000 4.08 12 Kingdom Securities Ltd 5,250,000 4.08 13 NIC Securities Ltd 5,250,000 4.08 14 Ngenye Kariuki & Company Ltd 5,250,000 4.08 15 Nyaga Stockbrokers Ltd (under statutory management) 5,250,000 4.08 16 Old Mutual Securities Ltd 5,250,000 4.08 17 Renaissance Capital (Kenya) Ltd 5,250,000 4.08 18 Shah Munge & Partners Ltd 5,250,000 4.08 19 Standard Investment Bank Ltd 5,250,000 4.08 20 Sterling Capital Ltd 5,250,000 4.08 21 Suntra Investments Ltd 5,250,000 4.08 22 Francis Thuo & Partners Ltd 5,250,000 4.08 23 Cabinet Secretary, Treasury of Kenya 6,562,500 5.10 24 Investor Compensation Fund Board 6,562,500 5.10 Totals (* - rounded) 128,625,000 100.00%* Source: NSE (figures have been rounded off) 13
Page 3 and 4: NAIROBI SECURITIES EXCHANGE LIMITED
Page 5 and 6: Our Vision “To be a leading secur
Page 7 and 8: Table of Contents Section Page Impo
Page 9 and 10: MIMS NSE Shares Offer Offer Period
Page 11 and 12: SBG Securities Limited CfC Stanbic
Page 13: Chairman’s Statement (USD 2.89 bi
Page 17 and 18: 1.15 Subsidiaries of the NSE Name &
Page 19 and 20: Section 2 Timetable The timetable f
Page 21 and 22: The dividend history is as follows:
Page 23 and 24: 3.3 Basis of Offer Price The Offer
Page 25 and 26: less than 1,000 applicants (excludi
Page 27 and 28: 4.13.5 All EFT and RTGS transfers m
Page 29 and 30: Regulation 3 (1) of the Foreign Inv
Page 31 and 32: Section 6 Development Of Capital Ma
Page 33 and 34: days after the sale of their shares
Page 35 and 36: 7.1.5 NSE 20 Share Index Performanc
Page 37 and 38: 8.2 Equities Profile The listed sha
Page 39 and 40: Bachelor’s degree in Mathematics
Page 41 and 42: IT departments. Jane has also worke
Page 43 and 44: youthful investors in the use of th
Page 45 and 46: Section 11 Material Risks The futur
Page 47: Section 12 Legal Opinion 45
Page 52 and 53: 2. THAT following the increase in a
Page 54 and 55: (b) the approval of chief executive
Page 56 and 57: the members from among or to repres
Page 58 and 59: share register of the Company or by
Page 60 and 61: 13.14 Material Indebtedness The Com
Page 62 and 63: 13.27 Expenses of the Offer Table 1
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Annexures Annexure A Nairobi Securi
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Annexure A2 Nairobi Securities Exch
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Serial No. Offer Opens: 9.00am, 24
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Notes 113
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