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NSE-Web-Prospectus-2014

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Section 7<br />

Products & Performance<br />

The two main traded products at the <strong>NSE</strong> are equities and bonds.<br />

The information below is statistical, covers the period from 2002<br />

to 2013 and includes secondary market and primary market data.<br />

The exchange rates used were the prevailing rates at the end of<br />

each year under consideration.<br />

7.1.3 Turnover & Equity Turnover Ratio<br />

Figure 7.2 – Equity Turnover<br />

7.1 Equity Capital Markets<br />

7.1.1 Primary Market<br />

During the years 2002 – 2013, transactions have included<br />

initial public offers, rights issues, offers for sale, outward crosslistings,<br />

introductions, mergers, acquisitions, inward crosslistings<br />

and delistings. The grand total amount of capital raised<br />

is in excess of Kshs 130 billion (USD 1.52 billion).<br />

The largest single transaction was in year 2008 - the GOK<br />

divestiture in Safaricom Ltd, which raised Kshs 50 billion (USD<br />

583 million). The offer for sale was subscribed 532%. Kshs 50<br />

billion itself was raised from Kenyans and East Africans via over<br />

800,000 applications. The balance of the heavy subscription<br />

was from foreign bids.<br />

The heavy oversubscriptions period was in the full calendar<br />

years 2006, 2007 and 2008 most without ‘bookbuilding’.<br />

Oversubscriptions next returned in the calendar year 2012<br />

mainly during rights issues.<br />

7.1.2 Market Capitalisation<br />

Figure 7.1 – Equity Market Capitalisation<br />

Source: <strong>NSE</strong><br />

The turnover improved from Kshs 2.8 billion in 2002 to Kshs<br />

155 billion in 2013 (USD 1.8 billion).<br />

Based on year end closing equity market capitalization, the<br />

highest equity turnover ratio was 15.18% in 2006 while it was<br />

11.21% in 2013.<br />

7.1.4 Share Turnover Velocity<br />

Figure 7.3 – Share Turnover Velocity<br />

Source: <strong>NSE</strong><br />

The market capitalization as of 31 December 2013 was just<br />

below Kshs 2 trillion (or USD 23 billion) using the year end rate<br />

of Kshs 86 to 1USD.<br />

Between 2002 and 2013 the Kenya Shilling growth in equities<br />

market capitalization was 1,614% or on average 146.7% per<br />

annum. In USD this was 1,417% or 129% per annum.<br />

Source: <strong>NSE</strong><br />

The graph is share turnover velocity (share turnover divided by<br />

market capitalization). The highest was 120% in 2006 while<br />

2013 closed at 81%.<br />

The highest number of equity deals was 974,000 in 2006 with<br />

shares volume at 7.3 billion. The 2013 number of equity deals<br />

was just over 426,000 with shares volume at 7.6 billion.<br />

32

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