The Nairobi Securities Change (NSE) is planning a devoted expertise board to courtroom venture-backed (VC) startups to public markets, because it seeks to shake off its popularity as a house for blue-chip corporations like banks, telcos, and brewers.
Talking throughout an Enza Capital session on the open bell ceremony on the sidelines of Africa Tech Summit (ATS) on February 12, NSE chief itemizing officer Present Kori stated the bourse was actively exploring a specialised tech section that may sit underneath its current market construction however be tailor-made to high-growth, early-stage corporations throughout the continent.
“We’ve all the time had this market notion that the NSE, notably, is for blue chips,” he stated. “That solely the very large corporations can come right here to boost capital. That’s one thing we’re intentionally attempting to vary.”
The push follows a reassessment of earlier efforts to assist startups and SMEs through the Ibuka programme to go public. The NSE rolled out Ibuka in 2018 to assist small corporations enhance investor readiness, formalise governance constructions, and tighten monetary reporting in preparation for eventual listings.
Ibuka was deliberate to assist small companies increase capital, however uptake has been gradual. “Whereas it was effectively intentioned, it didn’t see the success it was meant to have,” Kori conceded.
Kori stated new regulatory modifications have given the alternate extra room to experiment, and a tech-focused board is on the prime of the agenda. Current reforms enable the NSE to create sub-boards underneath its two foremost segments—the Important Funding Market and the Development Enterprise Market Phase (GEMS) for SMEs—opening the door to sector-specific platforms.
“That’s the icing on the cake,” Kori stated. “The regulation permits the NSE to create boards underneath these two foremost boards, particularly for very particular sectors.”
In most African bourses, tech startups are principally grouped with small companies. Solely the Johannesburg Inventory Change (JSE) and the Nigerian Change Group (NGX) have clearly branded, junior boards focusing on high-growth tech startups. The Egyptian Change homes them throughout the Tamayuz SME market, and the Casablanca Inventory Change depends on its Elite programme to arrange corporations for IPO.
Competing for the area’s tech champions
NSE’s plan comes as African startups mature, and traders start to search for exit routes past commerce gross sales and offshore listings. Whereas Kenya stays certainly one of Africa’s most energetic expertise hubs, its public markets have seen little of that progress.
Regardless of Nairobi’s popularity because the area’s tech capital, the NSE has few pure expertise counters. The alternate has traditionally been dominated by banks, telecommunications, and client items, together with Safaricom, Fairness Group, British American Tobacco (BAT), and East African Breweries (EABL).
Kori stated the alternate needs to unlock a pipeline of VC- and PE-backed corporations which have up to now remained in personal arms.
“On the Nairobi alternate, we don’t have many tech corporations,” he stated. “But Kenya continues to be largely thought-about to be the tech dwelling throughout the area. That may be a sector we’ve been actively trying to unlock.”
Liquidity isn’t an issue
Nairobi Change believes that liquidity isn’t an issue within the Kenyan market; mobilisation is. Cash market funds have been among the many best-performing property within the nation over the previous two years, buoyed by excessive rates of interest. Property underneath administration have grown sharply, drawing retail savers looking for yield and security.
The bourse hopes to redirect a few of that capital into higher-risk, higher-growth devices similar to tech shares using on the latest launch of Ziidi Dealer by Safaricom’s M-Pesa platform—which permits retail traders to purchase and promote shares through cellphones—has raised hopes {that a} new technology of younger, digitally native traders may deepen market participation.
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