Nairobi Securities Exchange Plc · NSEKE:NSE
Nairobi Securities Exchange — Investor Presentation (November 2009)
31 slides from Nairobi Securities Exchange's investor presentation, Nov 24, 2009
Slide 1: Stakeholders' Workshop, The Sarova Stanley, 24 November 2009
Stakeholders’ Workshop, The Sarova Stanley Tuesday, 24 November 2009
Slide 2: Agenda
Agenda g 1.Background 2 Rationale 2.Rationale 3.Strategy 4 Governance 4.Governance 5.Regulatory Role 6 Value Allocation 6.Value 7.Dilution 8 Listing 8.Listing 9.Conduct of Business 10 Regional Integration 10.Regional 2
Slide 3: Background
NAIROBI STOCK EXCHANGE Background > oe |
Slide 4: Background: Milestones
Background g Milestones • 1920s: Dealingg in shares and stocks starts in the colony g • 1954: Registration under the Societies Act • 1991: Registration g under the Companies Act • 2006: Intention to Demutualise 4
Slide 5: Rationale
NAIROBI STOCK EXCHANGE Rationale
Slide 6: Rationale
Rationale • Commercial orientation – for profit company • Strategic alliances – ability to offer equity • Regional integration – merger of regional exchanges • Capital raising – ability to access financing • Investment in technology – upgrade of platforms • Foster innovation – diversification of the
Slide 7: Strategy
NAIROBI STOCK EXCHANGE Strategy oe }
Slide 8: Strategy
Strategy gy • Five Year Corporate Plan 2010 – 2014 • Required as part of application for demutualisation • Five Strategic Objectives - Grow the value of existing business lines - Diversify into new areas of business - Build the brand - Build capacity p y - Demutualise 8
Slide 9: Mandate
NAIROBI STOCK EXCHANGE Mandate
Slide 10: Mandate
Mandate 1. For profit, commercial company under the Companies Act; 2. Licensed Exchange under the Capital Markets Act; 3. Subject to the requirements of the Demutualization Act; 4 As 4. A a licensed li d Exchange E h under d theh CMA A Act, the h EExchange h has certain public interest responsibilit
Slide 11: Governance
NAIROBI STOCK EXCHANGE Governance oe |
Slide 12: Board
Board NSE to adopt a mandate for its Board:- 1. Responsible for setting policy and strategy, and supervising management; 2 2. M Management t is i responsible ibl for f operations. ti NSE to adopt a code of ethics (including conflict of interest policies) for its Board. As a general principle, princi
Slide 13: Board
Board Thereafter:- 1. Director candidates are nominated (based on fit and proper test) by the Board’s Corporate Governance Committee and elected by shareholders at each AGM; 2. Directors may be elected for 2 – 3 years and elections staggered; 3. Shareholders may nominate Directors in accordance with
Slide 14: Committees
Committees Board Committees will have a majority of independent directors:- 1. Finance Committee; 2. Audit Committee; 3. Human Resources Committee; 4 Risk 4. Ri k Management M Committee; C i 5. Corporate Governance Committee. 14
Slide 15: Regulatory Role
NAIROBI STOCK EXCHANGE Regulatory Role > oe
Slide 16: Regulatory Responsibilities
Regulatory Responsibilities The NSE’s high level responsibilities will be set out in the CMA Act and the Licensing Regulations:- They will include: 1. Market regulation – trading rules & surveillance; 2. Authorized user regulation – business conduct rules & inspections; 3 Listings – listing standard
Slide 17: SRO Unit
SRO Unit The SRO Unit must be functionally and physically separate from the business operations of the NSE:- 1. Due to potential business conflicts, the SRO unit will bear responsibility for dealing with listing applications and the monitoring and administration of the ongoing listing rules; 2. The
Slide 18: SRO Unit
SRO Unit 6. The Board of Directors shall approve all NSE rules, including rules on market conduct, business conduct and listing; 7. The CMA has an oversight responsibility over NSE SRO operations, which in l de regular includes eg l reporting epo ting to CMA CMA, andnd other othe protocols p oto ol
Slide 19: Value Allocation
NAIROBI STOCK EXCHANGE Value Allocation > ;
Slide 20: Value Allocation
Value Allocation 1. On demutualization of the NSE:- 1. On conversion of NSE:- 1. Shares to be issued and reserved for the Members; 2 Shares 2. Sh t b to be reserved d for f ththe IInvestor t C Compensation ti FFund d (ICF); and 3. Shares to be reserved for the Government of Kenya. 2. The shares to b
Slide 21: Dilution
NAIROBI STOCK EXCHANGE Dilution 21
Slide 22: Dilution
Dilution 1. Members will undertake to reduce their aggregate shareholding to below 40% through either:- 1. Private Placement; or 2. IPO and Self-listing. 22
Slide 23: Listing
NAIROBI STOCK EXCHANGE Listing 23
Slide 24: Listing
Listing 1. Timing: Within 1 to 3 years after demutualization, unless the CMA grants an extension. 2. Approvals: CMA must approve:- 1. The application to list and an information memorandum to raise capital (if applicable); 2. The transaction advisors; 3 Along with the sale of equity by the initial sh
Slide 25: Conduct of Business
NAIROBI STOCK EXCHANGE Conduct of Business > oe .
Slide 26: Conduct of Business
Conduct of Business The NSE’s business shall operate under the auspices of its Board and be administered by management. NSE business initiatives and new products are not subject to CMA approval, but the CMA’s jurisdiction and regulatory responsibilities may require specific legal and regulatory chan
Slide 27: Conduct of Business
Conduct of Business 7. The NSE should set its own fees and prices for products, subject to a maximum fee formula or price for core services set by CMA on application of NSE. (This regulation is justified by the fair access p in iple as long as NSE is principle i effectively effe ti el a monopoly mon
Slide 28: Regional Integration
NAIROBI STOCK EXCHANGE Regional Integration a .
Slide 29: Regional Integration
Regional Integration • Guided by the existing framework: Roadmap to Political Federation; -Roadmap -EAC Treaty; and -Common Market Protocol • Endgame is a single EA Exchange with trading platforms in each Partner State • Demutualisation is the first step • Merger discussions after all regional Excha
Slide 30: Questions?
NAIROBI STOCK EXCHANGE Questions? oe .
Slide 31: Stakeholders' Workshop, The Sarova Stanley, 24 November 2009
Stakeholders’ Workshop, The Sarova Stanley Tuesday, 24 November 2009
Nairobi Securities Exchange — Investor Presentation (November 2009) on 6ix