Nairobi Securities Exchange PLC · NSEKE:NSE
Nairobi Securities Exchange — African Dairy Conference & Exhibition 2005
25 slides from Nairobi Securities Exchange's conference presentation, May 23, 2005
Slide 1: What the NSE can do for East Africa's Dairy Sector
What the NSE can do for East Africa’s Dairy Sector A PRESENTATION TO THE ESADA AT THE AFRICAN DAIRY CONFERENCE & EXHIBITION. By: Mr. Chris Mwebesa Chief Executive May 23 – 25, 2005 Nairobi, Kenya NAIROBI STOCK EXCHANGE
Slide 2: Table of Contents
TABLE OF CONTENTS How the Capital Markets can help Sourcing Capital through the NSE Absorptive Capacity of the Capital Markets Eligibility Criteria for Listing New Prospects for Listing
Slide 3: How the Capital Markets can help
How the Capital Markets can help NAIROBI STOCK EXCHANGE
Slide 4: The Role of the NSE
The Role of the NSE • Even though the NSE is primarily a trading platform we have a secondary role of allocation of capital to the most productive sectors of the economy; • Corporates need to explore this source of capital by issuing securities, just as the government raises revenues through privati
Slide 5: The Role of the NSE
The Role of the NSE • Finance acquisition of latest in dairy technology; • Finance acquisition of equipment; • Overall working capital requirements (food ingredients, veterinary medicine, accessories and many more); Can all the achieved by listing securities at the NSE.
Slide 6: Institutions list securities primarily
Institutions list Securities primarily: To raise funds for expansion and growth without the interest burden of funds borrowed from lending institutions. To improve the liquidity of their securities. To increase public awareness about the institution and its products. To unlock value. Foundin
Slide 7: Sourcing Capital through the Exchange
Sourcing Capital through the Exchange NAIROBI STOCK EXCHANGE
Slide 8: Equity Financing
Equity Financing Raising funds through an equity listing: Securities may be brought to listing by way of: Initial public offering (IPO): where the public at large is invited to subscribe. Private placement: shares are placed for sale to already identified investors.
Slide 9: Debt Financing
Debt Financing What are the borrowers/issuers of Bonds looking for Long Tenors Large Amounts (acquisition of equipment, technology)
Slide 10: Financial Benefits of Capital Markets Financing
Financial Benefits of Capital Markets Financing Optimization of Capital Structure Far too many organizations are too heavily geared Bank debt increasingly the cause of bankruptcies or other insolvency interventions Lowering of Cost of Capital Required dividend return and debt interest payments
Slide 11: Indicative Costs of Equity
Indicative Costs of Equity Prices (Kshs.) Mkt Cap. EPS DPS P/E Dividend Agricultural Unilever Tea 113.00 5,522.88 7.39 8.00 15.29 7.08% Kakuzi 46.75 916.30 4.27 1.00 10.95 2.14% Sasini 37.50 1,425.35 20.29 2.50 1.85 6.67% Commercial & Allied Kenya Airways Ltd 26.00 12,002.00 2.82 0.75 9.22 2.88% Nat
Slide 12: Indicative Costs of Equity
Indicative Costs of Equity Prices on 20/5 Mkt Cap. EPS DPS P/E Dividend MAIN INVESTMENT MARKET SEGMENT (MIMS) Industrial & Allied BOC (K) 135.00 2,635.94 8.20 4.35 16.46 3.22% Bamburi 102.00 37,021.85 4.73 2.80 21.56 2.75% B.A.T 218.00 21,800.00 12.10 16.50 18.02 7.57% E.A.Breweries 130.00 85,667.22
Slide 13: Indicative cost of listed debt
Indicative cost of listed debt Name Ten Issue Matur Interest Amount Raised or Date ity (Kshs. millions) (Yrs Date ) EADB 4 11/7/01 26/4/ TB + 2,000.00 MTN 06 0.75% (Currently 1,200 has been redeemed) EADB 7 19/7/04 1/7/1 7.5% 800.00 (Second MTN 1 tranche of 700.00 million yet to be raised and listed
Slide 14: Other Benefits of Capital Markets Financing
Other Benefits of Capital Markets Financing Provides a market Objective valuation for securities. of securities by market forces. Greater Greater efficiency liquidity/transferab ility of securities, due to more reduces risk of rigorous disclosure holding the asset. requirements. Greater pu
Slide 15: Absorptive Capacity of the Capital Markets
Absorptive Capacity of the Capital Markets NAIROBI STOCK EXCHANGE
Slide 16: Absorption Capacity of the Capital Markets
Absorption Capacity of the Capital Markets INSTITUTION AMOUNT (Ksh. bn) Insurance 4.46 Fund Manager 2.24 Co-operative Sector 8.60 Pension Funds 6.73 Households 19.49 Individuals 0.05 Non Bank Financial 2.12 Instit. TOTAL 59 billion per annum
Slide 17: Kenya's Diaspora
Kenya’s Disapora The unrealized potential of Kenya’s Disapora Amounts (USD. Millions) Net Yr–Jan 04 Feb-Apr May-Jul Aug-Oct Nov-Jan Yr–Jan05 Abs. Private Change Transfers USD. 767 150 160 160 172 642 (125) Millions 62,28 12,18 12,99 12,99 13,96 52,13 10,15 Kshs. 0.4 0.0 2 2 6.4 0.4 0 SD. : Kshs 81.2
Slide 18: Eligibility Criteria for Listing
Eligibility Criteria for Listing NAIROBI STOCK EXCHANGE
Slide 19: The Market Segments
The Market Segments The Main Board The Main Investment Market Segment (MIMS); The Alternative Investment Market Segment (AIMS); The Fixed Income Securities Market Segment (FISMS);
Slide 20: Eligibility Requirements for Public Offering of Shares and Listing
Eligibility Requirements for Public Offering of Shares and Listing Part A Part B Requiremen Criteria for Criteria for t MIMS AIMS Size: Share Min. authorized Min. Capital issued and fully authorized paid up share issued and capital of Ksh. fully paid up 50.0 million. share capital of Ksh. 20.0 milli
Slide 21: Eligibility Requirements for Public Offering of FIS and Listing on the FISMS
Eligibility Requirements for Public Offering of FIS and Listing on the FISMS Requirement Size: Share Min. authorized issued and fully paid up Capital share capital of Ksh. 50.0 million, and net assets of Ksh. 100 million Immediately before the IPO. Listing and All fixed income securities (FIS) excep
Slide 22: Eligibility Requirements for Public Offering of FIS and Listing on FISMS
Eligibility Requirements for Public Offering of FIS and Listing on FISMS Requirement Size of the The minimum size of issue shall be Ksh. Issue 50 million. The minimum lot size shall be: Ksh. 100,000 for corporate bonds and preference shares or higher amount as maybe required by the Authority; and
Slide 23: New Prospects for Listing
New Prospects for Listing NAIROBI STOCK EXCHANGE
Slide 24: Main Investment Market Segment and Fixed Income Securities Segment
Main Investment Market Segment 30% of Kenya Electricity Generating Company (KENGEN) Equity Commercial Bank Fixed Income Securities Segment PTA Bank year Floating Rate Kshs. 1.6 billion bond Athi River Mining 5 year Floating Rate Kshs. 600.0 million bond EADB second tranche Kshs. 700 millio
Slide 25: End
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