Trading volumes at the Nairobi Securities Exchange were already low at the beginning of the year when Covid-19 hit Kenya, so it was reasonable to expect further depression. But, as CEO Geoffrey Odundo says in this interview, a pleasant surprise was in store. W hat has been the impact of Covid-19 on NSE operations?
To our surprise, Covid-19 presented an opportunity for new investors to come in and we saw trading volumes rising beyond our expectations.
For example, our equity market trading turnover in the month of March alone was about $190m compared to $120m in the previous year. This trend extended to the month of April too.
This is due to the attractive prices presented by the market and good dividend yields announced by companies reporting their 2019 results, with some yields as high as 10%, competing effectively with T-bills.
The other success story following the impact of Covid-19 is the seamless transition to a fully automated environment. For years, we had been building a Business Continuity Plan and models; Covid-19 has thrown us deep into the real-life situation of implementing the plan.
So, currently, we are operating fully remotely from the start to end of each trading day, including surveillance, monitoring and reporting. Our brokers are also able to trade remotely through the VPN access we have provided. Take us through the NSE debt market, what is the breakdown between government debt and corporate bonds?
Our debt market is composed of three aspects: First, there is the sovereign/government debt, which constitutes close to 90% of our total outstanding debt trading on the market.
One of the milestones we have achieved is the establishment of a relatively reliable and transparent yield curve. Players who are investing in this market are able to price off this curve.
Second, there is the corporate debt market that takes a large share of the remaining debt market. In this space we are proud to say that we are one of the leading markets in Africa.
Third, there are the green bonds – the first of which was launched this year.
Overall, the total value of our outstanding debt market is in the region of $190m. How successful has the M-Akiba bond been and what can we learn from this? M-Akiba is a retail bond launched three years ago; the first tranche has already matured and the second one matures in September, but its adoption has been slower.In […]