The Nairobi Securities Exchange has emerged as the fifth best stock market in Africa. The ranking has come in a report on the state of securities markets by Barclays Africa Group.
This saw the local bourse beat former securities giants such as Nigeria, Egypt and Ghana.
In the report dubbed Barclays Africa Group Financial Markets Index 2017, the NSE managed an overall score of 9 points out of the possible 100. The report looked at 17 key markets in Africa, of which South Africa was ranked as the top securities market with a score of 92. Coming in second was Mauritius with 66 points, and third was Botswana with 65 points. Namibia was ranked fourth with 61 points followed by Kenya.
The report analyzed the depth of a country’s market, access to foreign exchange, market transparency, tax and regulations, legality and enforcement, and the available macroeconomic opportunities.
On market depth, the NSE came in at position four. In the East and Central African region markets, the NSE emerged top. It was however beaten by Uganda in the category of easy access to foreign exchange.
“We have to be aware of the fact that as we position ourselves as a prime investment destination, so are our neighbours. It is therefore incumbent upon us to amplify our focus on reforms to make the business environment more investor friendly,” said Jeremy Awori, the Barclays Bank of Kenya’s Managing Director.
This ranking comes in the wake of developments by the local bourse that are aimed at reducing the number of days it takes to buy and sell shares.
In the same vein, the NSE is planning to launch a platform that will enable investors to borrow and lend each other shares from June this year.
“We are upgrading our systems to allow the securities lending and borrowing framework to work. That should be coming onstream possibly in the second quarter of this year. The system can also be scaled up to bring on board more products,” said NSE chief executive officer Geoffrey Odundo.
According to Barclays Africa Group Head of Markets George Asanti, the NSE is poise for a better performance in the coming days. He recommended that the NSE looks at ways through which it can diversify away from fixed income and securities.
“What is lacking is market makers to strengthen brokerage culture. The market needs deep-pocketed makers to take on risks,” he said. In response Mr. Odundo noted that the NSE was working towards enhancing the trading of pension funds and unit trusts as alternative products.
the report of the NSE being 5th with NSE managed an overall score of 9 points out of the possible 100, am shocked i thought Kenya was doing well ‘THE TOP BOSS’ in stock market in Africa, we need to do something about the score we should be No. 1 in Africa, by June 2018 we should be top 3,