Nairobi bourse has resisted pressure to join the East Africa joint stock exchanges that went live a week ago, chief executive Geoffrey Odundo has said, citing trading integrity concerns.
Mr Odundo says Nairobi Securities Exchange (NSE) is still waiting for the concerns it had raised around the integrity of the crucial software that runs the project to be addressed before deciding to join.
Uganda, Rwanda and Tanzania bourses started trading as a single market a week ago after interconnecting their trading systems and hooking to the EAC Capital Markets Infrastructure (CMI) Information Technology platform.
This means that an investor in Uganda will be able to buy and sell shares in Tanzania and Rwanda through a single stockbroker, reduction transaction period and costs linked to brokerage fees.
“We are still evaluating our position. We stayed out because of certain concerns around procurement of the software,” said Mr Odundo in an interview.
“We were very unhappy with it and that is why we decided to be out of it until our concerns around procurement are addressed. The plan is to be part of the whole thing in the long run but we are still waiting for updates on how the system will run.”
Uganda, Rwanda and Tanzania bourses started trading as a single market a week ago after interconnecting their trading systems and hooking to the EAC Capital Markets Infrastructure (CMI) Information Technology platform.
Kenya, which runs the largest stock market in the region in terms of market capitalisation and number of listed companies, had pulled out of the project earlier.
The NSE expressed dissatisfaction on how a Pakistan firm— InfoTech Private Ltd—was awarded the contract to provide the crucial software.
NSE market capitalisation is about Sh2.25 trillion compared to Dar es Salaam Stock Exchange (Sh714 billion), Uganda Securities Exchange (659 billion) and Rwanda Stock Exchange (389 billion).