# State of the NSE

An episode of [The Mwango Capital Podcast](https://invisiblenetwork.ai/podcast/1583367792), 2 Aug 2024, 1 h 11 min.

Audio: https://api.substack.com/feed/podcast/147203573/8d57ba3c0440b89a475fe01ad7b9363e.mp3

In this episode recorded on 09.07.2024, we host the Nairobi Securities Exchange (NSE) CEO, Frank Mwiti, for an in-depth conversation on the state of the exchange. We cover the current state of the securities exchange, market performance in 2024, access to data, listings from the government, the corporate debt market, and his vision for NSE’s future. Subscribe to get notified when we make a new post. Key Quotes “Currently, the participation, for example, by retail investors in Kenya is less than 10%. So, you can see that a huge chunk of our market is reliant on institutional capital. And by the way, more than 60 percent of that institutional capital is foreign.” “Given that we are in a high-interest environment, and my view, I think that is going to persist for quite a while, especially given the activities of the last few weeks in our country. The government is going to, in my view, continue borrowing at fairly elevated levels, the upper teens, which means that banks in all likelihood will continue to lend to the private sector in the mid-twenties. And that's a secure debt now, which means there is opportunity potentially to come to the public market and raise funds at potentially more competitive terms including potentially even raising a hard currency denominated funding through our market.” “The green bonds, let me call it the larger sustainability ESG agenda, there's more capital looking for opportunities than there are opportunities but the single biggest issue is origination and structuring.” Show Notes 00:00:00 Introduction 00:05:05 Overview of the NSE 00:09:12 Kenyan Capital Markets 00:12:15 2024 Market Performance 00:20:52 Strategies to Attract Investors 00:35:54 Access to NSE Data and the Earnings Calendar 00:45:43 Listing from the Govt, Tech Companies, and the Impact of AI 00:52:58 The Corporate Bond Market 00:59:56 Cost Of Investing in the NSE 01:05:56 Future Outlook Get full access to The Mwango Weekly at mwangocapital.substack.com/subscribe

## Transcript

[0:00] SPEAKER_00: Thank you all for joining us this evening on Wango Spaces.
[0:02] SPEAKER_02: Today,
[0:03] SPEAKER_02: we are privileged to have the new CEO of the NSC,
[0:05] SPEAKER_02: Frank Wheating,
[0:06] SPEAKER_02: and he's here with us to discuss market,
[0:08] SPEAKER_02: his journey towards joining NSC and his vision for the NSC.
[0:12] SPEAKER_02: Frank,
[0:13] SPEAKER_02: if you can introduce yourself,
[0:14] SPEAKER_02: tell us a bit about you and maybe a quick highlight of your journey so far to
[0:19] SPEAKER_02: becoming NSC CEO.
[0:21] SPEAKER_02: Karibu sana, Frank.
[0:22] SPEAKER_02: Thank you.
[0:22] SPEAKER_02: Thank you very much.
[0:23] SPEAKER_02: And I should say good evening,
[0:26] SPEAKER_02: given that I'm in Kenya,
[0:27] SPEAKER_02: but I'm aware other people might be in another region.
[0:29] SPEAKER_02: So, my greetings.
[0:31] SPEAKER_02: As introduced, my name is Frank Mwiti.
[0:34] SPEAKER_02: I'm the CEO of the Nairobi Securities Exchange.
[0:39] SPEAKER_02: I took up this role in the beginning of May this year, so fairly new.
[0:43] SPEAKER_02: However,
[0:44] SPEAKER_02: I took a bit of time as well before joining to familiarize myself with the larger
[0:50] SPEAKER_02: capital market ecosystem,
[0:52] SPEAKER_02: particularly the key decoders within the capital market ecosystem.
[0:56] SPEAKER_02: So the capital market itself is not unfamiliar to me.
[1:00] SPEAKER_02: By way of background, I started my career in management consulting.
[1:04] SPEAKER_02: Straight from uni, I joined a firm called PwC, which some of you might know.
[1:08] SPEAKER_02: And then I transitioned with them.
[1:09] SPEAKER_02: I joined them in Kenya, transitioned with them to UK, left and joined UBS Investment Bank.
[1:16] SPEAKER_02: After that, I moved to DB, Deutsche Bank, among other areas.
[1:21] SPEAKER_02: I once spent a total of 15 years based in London,
[1:24] SPEAKER_02: but working within continental Europe,
[1:26] SPEAKER_02: the east coast of the UK,
[1:28] SPEAKER_02: a bit of the Middle East,
[1:29] SPEAKER_02: as well as Russia.
[1:30] SPEAKER_02: And then of course, with time, it was time to come back home.
[1:33] SPEAKER_02: So I came back home in mid 2019.
[1:36] SPEAKER_02: I joined a firm called EY Amsterdam as a partner there.
[1:41] SPEAKER_02: More specifically,
[1:42] SPEAKER_02: as the Eastern Africa market leader responsible for driving the strategy and M&A
[1:48] SPEAKER_02: business across a number of markets in Eastern Africa.
[1:51] SPEAKER_02: Overall,
[1:52] SPEAKER_02: I have 23 years of experience right across investing banking,
[1:56] SPEAKER_02: corporate finance,
[1:57] SPEAKER_02: transactional,
[1:58] SPEAKER_02: and of course,
[1:59] SPEAKER_02: management and consulting.
[2:00] SPEAKER_02: I studied law,
[2:01] SPEAKER_02: also qualified as an accountant,
[2:03] SPEAKER_02: but I never practiced law because by second year,
[2:05] SPEAKER_02: I knew I didn't want to practice law.
[2:07] SPEAKER_02: And more importantly, I think the most important thing is I am a father of two children.
[2:11] SPEAKER_02: But I guess the point to make here is that with a 23-year-old school,
[2:16] SPEAKER_02: both global and regional experience,
[2:18] SPEAKER_02: I guess as part of this conversation,
[2:20] SPEAKER_02: we will talk about how I think that applies to the NSE and the larger capital market.
[2:26] SPEAKER_02: And more importantly,
[2:27] SPEAKER_02: you know,
[2:28] SPEAKER_02: what some of our thoughts are around to invent a more decentralized organization as
[2:33] SPEAKER_02: an exchange,
[2:34] SPEAKER_02: but also being instrumental in realizing some of the economic development
[2:39] SPEAKER_02: objectives that we as the Kenyan citizens,
[2:42] SPEAKER_02: but also the larger investor community desire.
[2:45] SPEAKER_00: Perhaps you can tell us a bit about, did you envision becoming an NSECEO from a young age?
[2:51] SPEAKER_00: Like, or when did you start having ambition to becoming the NSECEO?
[2:55] SPEAKER_02: Or have you had a problem with it?
[2:57] SPEAKER_02: The short answer would be no.
[2:59] SPEAKER_02: Maybe what I should mention is I also ran my own corporate finance advisory
[3:03] SPEAKER_02: business in the UK for quite a number of years,
[3:06] SPEAKER_02: primarily focused on emerging markets and frontier markets.
[3:09] SPEAKER_02: So it never really was an ambition to join the NSECEO per se.
[3:15] SPEAKER_02: given that I was running my own business.
[3:16] SPEAKER_02: And then, of course, joining the previous firm that I was with, EY as a partner.
[3:21] SPEAKER_02: I don't know whether partners are the business owners as well as being business leaders.
[3:26] SPEAKER_02: That of itself was, in my view, my own achievement.
[3:29] SPEAKER_02: If you ask me,
[3:30] SPEAKER_02: My intention was to branch out and build maybe my own institution, Nabigo, in later years.
[3:37] SPEAKER_02: I never really had dreams, let me put it that way, to add up to anything.
[3:41] SPEAKER_02: However,
[3:41] SPEAKER_02: in my view,
[3:42] SPEAKER_02: the more important point is why did I transition to anything from a different,
[3:46] SPEAKER_02: quite successful global firm?
[3:48] SPEAKER_02: The way I see it, I can disclose the effort of everything.
[3:51] SPEAKER_02: I am for seven years old, so I feel time to actually look at how
[3:56] SPEAKER_02: who bring to bear the experience one has gained over more than two decades now and
[4:02] SPEAKER_02: actually help in mission building.
[4:04] SPEAKER_02: And I don't say that lightly because my decision to join the NSC,
[4:09] SPEAKER_02: I did actually quite a lot of wide consulting.
[4:11] SPEAKER_02: There was an element of me being convinced of Go,
[4:13] SPEAKER_02: but the way I see it is this is a platform that is absolutely crucial to national development.
[4:19] SPEAKER_02: And I do not think that we can be successful as a country if the capital market is not so bad.
[4:24] SPEAKER_02: And a key component of the capital market, of course, is the frequent use of change.
[4:28] SPEAKER_02: Indeed, the frequent use of change is a barometer of the performance of the larger economy.
[4:33] SPEAKER_02: So my transition, simply put, to NEC was informed not just by commercial decisions.
[4:40] SPEAKER_02: It was also informed by AM47.
[4:43] SPEAKER_02: After three years,
[4:44] SPEAKER_02: what I think is a relevant experience,
[4:46] SPEAKER_02: I was approached and there was an opportunity to participate in nation building.
[4:50] SPEAKER_02: And that's what I took up.
[4:52] SPEAKER_02: Now, you will no doubt ask me how I think that is fair so far and what my views are.
[4:58] SPEAKER_02: We can discuss that in a bit more detail.
[5:00] SPEAKER_02: But in short, my ambition was always to remain within the financial services space.
[5:05] SPEAKER_02: So you've been around the capital markets, as you say, for a while.
[5:08] SPEAKER_02: Maybe you should start by explaining to someone who's new what the NSE is.
[5:12] SPEAKER_02: So the NSE is a marketplace,
[5:14] SPEAKER_02: and it's a marketplace that primarily enables investors in the wider economy to
[5:21] SPEAKER_02: access opportunities within our economy.
[5:24] SPEAKER_02: Let's put it that way.
[5:25] SPEAKER_02: So it's a marketplace,
[5:26] SPEAKER_02: a meeting place for investors as well as those that are looking either to raise
[5:30] SPEAKER_02: capital
[5:31] SPEAKER_02: or to exit, sell their businesses, as an example, or issue other capital raising type transactions.
[5:38] SPEAKER_02: If you understand it basically as that,
[5:41] SPEAKER_02: I think the question becomes how is it different from other types of capital,
[5:45] SPEAKER_02: for example.
[5:46] SPEAKER_02: And maybe the three things to mention is the first thing is that within the larger
[5:50] SPEAKER_02: capital market space,
[5:52] SPEAKER_02: you have,
[5:52] SPEAKER_02: of course,
[5:53] SPEAKER_02: banks.
[5:54] SPEAKER_02: which everyone is more or less familiar with,
[5:57] SPEAKER_02: where you can act different types of financing,
[6:00] SPEAKER_02: financial subsidiarity,
[6:01] SPEAKER_02: and of course,
[6:02] SPEAKER_02: the most notable one being debt loan.
[6:05] SPEAKER_02: And then you have the private capital that either sits with the individuals or with the
[6:11] SPEAKER_02: firms,
[6:12] SPEAKER_02: such as private equity firms,
[6:14] SPEAKER_02: and those are entities that are looking really to deploy capital to private opportunity.
[6:20] SPEAKER_02: And then you have public market that are looking to deploy opportunities through an
[6:24] SPEAKER_02: organized market,
[6:25] SPEAKER_02: of which NAC is one.
[6:28] SPEAKER_02: And what NAC does is it enables
[6:31] SPEAKER_02: different types of opportunities.
[6:33] SPEAKER_02: So the incubators have different types of capital.
[6:37] SPEAKER_02: So we have COTI.
[6:38] SPEAKER_02: That's a simply put incubator share where you can, companies can issue shares for people to buy.
[6:43] SPEAKER_02: You can invest in Sataricum, KCB, ATC.
[6:47] SPEAKER_02: You have fixed income.
[6:48] SPEAKER_02: This is where both private companies as well as the government issue instruments
[6:53] SPEAKER_02: such as the corporate bonds,
[6:55] SPEAKER_02: treasury bonds,
[6:55] SPEAKER_02: treasury bills.
[6:57] SPEAKER_02: etc for people again to buy or go invest in and you have derivatives which are more
[7:02] SPEAKER_02: shall we say complex products that you can use them to make money you can use them
[7:06] SPEAKER_02: for aging purposes among other things and then of course we also have structured
[7:10] SPEAKER_02: products so things like real estate investment trust exchange traded funds
[7:15] SPEAKER_02: ETC, which are also available through a platform like ours.
[7:18] SPEAKER_02: The key thing to note is that all that activity is regulated.
[7:23] SPEAKER_02: You are allowing the public to access opportunities through a regulated platform.
[7:27] SPEAKER_02: Now, in more developed markets, you have JAR, AlarmJAR,
[7:31] SPEAKER_02: variety of opportunities.
[7:33] SPEAKER_02: But in our market in Kenya here, we have equity, fixed income, derivative and other structured products.
[7:39] SPEAKER_02: And we will talk a bit more about what else we are thinking about other products.
[7:43] SPEAKER_02: Then the other bit to mention about an exchange like ours, of course, is that
[7:48] SPEAKER_02: It also enables different types of entities to access capital.
[7:53] SPEAKER_02: So it's not just a big company.
[7:55] SPEAKER_02: It's not just that Safari comes at the KCBs and equities of this world.
[7:59] SPEAKER_02: We also provide opportunities for smaller entities,
[8:01] SPEAKER_02: SMEs as an example,
[8:03] SPEAKER_02: and we can talk a bit more about that.
[8:05] SPEAKER_02: The exchange also does actually also support the development agenda of the country.
[8:11] SPEAKER_02: For example,
[8:12] SPEAKER_02: there are conversations we're having on how to issue,
[8:14] SPEAKER_02: for example,
[8:15] SPEAKER_02: instruments that address climate change.
[8:18] SPEAKER_02: For example, grid bonds, for example.
[8:19] SPEAKER_02: We're talking about issuing gender bonds, issuing impact bonds, and things like this.
[8:24] SPEAKER_02: So you can see there is, of course, opportunity for pure profit, if I were to put it that way.
[8:29] SPEAKER_02: but it's also an opportunity to enable capital to be directed to a development-type agenda.
[8:34] SPEAKER_02: And then the last thing to mention is that the exchange, of course, also does many other things.
[8:39] SPEAKER_02: For example, it works with the investor to improve financially for them.
[8:44] SPEAKER_02: It works with the larger capital market ecosystem to develop new innovation.
[8:49] SPEAKER_02: For example, at NEC, we have a vision around working capital solutions.
[8:54] SPEAKER_02: e-voice discounting and things like this, among other things.
[8:56] SPEAKER_02: Now,
[8:57] SPEAKER_02: the truth of the matter is that there is yet more work that we need to do to
[9:02] SPEAKER_02: continue to be even more relevant to our stakeholders.
[9:05] SPEAKER_02: We can unpack that a bit more.
[9:07] SPEAKER_02: But in short, this is a platform that enables capital to meet opportunity, simply put.
[9:12] SPEAKER_02: Very well put.
[9:13] SPEAKER_02: And now to your initial observations,
[9:15] SPEAKER_02: as in maybe a quote-unquote outsider who's come into the company now,
[9:19] SPEAKER_02: what's your quick observation around the capital markets in Kenya on where they are
[9:24] SPEAKER_02: and where they need to be?
[9:24] SPEAKER_02: I will summarize it under three themes that I will put to you today.
[9:27] SPEAKER_02: The first one is that we still have a long way to go to close the gap of funding
[9:34] SPEAKER_02: that is required in our market,
[9:36] SPEAKER_02: both on the public side to support government,
[9:38] SPEAKER_02: as well as on the private side.
[9:40] SPEAKER_02: The capital market as a whole,
[9:41] SPEAKER_02: and that includes banks,
[9:43] SPEAKER_02: it includes the exchange,
[9:44] SPEAKER_02: it includes investment banks,
[9:46] SPEAKER_02: stockbrokers,
[9:47] SPEAKER_02: fund managers,
[9:48] SPEAKER_02: etc.
[9:48] SPEAKER_02: The whole ecosystem, we have quite a bit of work to do to really move the needle on
[9:53] SPEAKER_02: mobilizing capital to go to the right opportunity.
[9:57] SPEAKER_02: And we'll talk a bit more on what our thinking there is on some of the initiatives
[10:00] SPEAKER_02: that we're thinking about.
[10:01] SPEAKER_02: The second thing of it,
[10:02] SPEAKER_02: which is very important,
[10:04] SPEAKER_02: which is we still have some work to do,
[10:07] SPEAKER_02: actually I would say significant work to do,
[10:09] SPEAKER_02: to bring the mercy to the capital market and the exchange in particular.
[10:13] SPEAKER_02: Currently, the participation, for example, by retail investors in Kenya is less than 10%.
[10:19] SPEAKER_02: So you can see that a huge chunk of our market is reliant on institutional capital.
[10:24] SPEAKER_02: And by the way, of that institutional capital, more than 60% is foreign.
[10:29] SPEAKER_02: So we have brothers and sisters and parents across the country that are not
[10:33] SPEAKER_02: actually participating in the exchange.
[10:35] SPEAKER_02: And therefore, there is work to do as a whole capital market ecosystem to actually mobilize and educate.
[10:41] SPEAKER_02: to enable a wider participation of our citizen labor to put it that way into our market.
[10:48] SPEAKER_02: So there's that second bit.
[10:49] SPEAKER_02: The third bit of it,
[10:50] SPEAKER_02: which is we need to bring more innovative products to our market that actually
[10:54] SPEAKER_02: speak to what our market needs.
[10:57] SPEAKER_02: There has been a tendency to cut and paste from other markets and then you bring
[11:02] SPEAKER_02: products that sometimes don't perform as one thought simply because they are
[11:06] SPEAKER_02: not necessarily reflective of the market need and the risk in our market.
[11:11] SPEAKER_02: So I think as a capital market,
[11:12] SPEAKER_02: fraternity is a huge,
[11:14] SPEAKER_02: huge role for us to sit down and actually understand what the issues are in our
[11:18] SPEAKER_02: market and come up with innovative products to solve for that.
[11:21] SPEAKER_02: I can tell you,
[11:22] SPEAKER_02: for example,
[11:22] SPEAKER_02: one of the things that we are thinking about is how do we enable investors that are
[11:27] SPEAKER_02: more capital to come to the market?
[11:29] SPEAKER_02: Can we do, for example, fractional trading where you don't have to buy
[11:34] SPEAKER_02: a full share.
[11:35] SPEAKER_02: You can buy a fraction of a share based on your capacity.
[11:39] SPEAKER_02: How do we enable someone deep in rural Kenya to actually access the market without
[11:45] SPEAKER_02: having to jump through so many hoops and doing it in a cost-effective way and
[11:51] SPEAKER_02: without a lot of technical expertise to do that?
[11:54] SPEAKER_02: In short, I think we need to be more relevant as a capital market.
[11:58] SPEAKER_02: NEC needs to be more relevant.
[11:59] SPEAKER_02: We are working on that.
[12:00] SPEAKER_02: And we need this community and larger community to also work with us to innovate
[12:05] SPEAKER_02: products that suit our market needs,
[12:07] SPEAKER_02: rather than just cutting and pasting,
[12:09] SPEAKER_02: you know,
[12:10] SPEAKER_02: what we have seen out there.
[12:11] SPEAKER_02: And then, of course, not to get the success that we anticipated.
[12:15] SPEAKER_02: We're going to maybe the next stage now and think about it in three different stages.
[12:20] SPEAKER_02: So first, let's look at the companies that are already listed.
[12:22] SPEAKER_02: I think there was quite a good start to the markets in 2024.
[12:26] SPEAKER_00: It's been quite a rough past 10 years for investors of the NSE.
[12:30] SPEAKER_00: But the NSE was up, I think, 44% when you look at it in USD terms.
[12:34] SPEAKER_00: And then local, it was up around 18%.
[12:37] SPEAKER_02: 0.4% in the first half of the year.
[12:40] SPEAKER_02: So maybe you can break down for us what led to that good performance before we
[12:44] SPEAKER_02: maybe go here next to the next stage of maybe discussing potential lifting and also
[12:49] SPEAKER_02: looking at how we can bring in potential more investors.
[12:52] SPEAKER_02: So let's start with the market as it is and how it's performed in the first half of the year.
[12:56] SPEAKER_02: So I guess the reference we're making is that in the first half of 2024 of this year,
[13:03] SPEAKER_02: NSE was actually the best performing market in Africa in USD terms.
[13:07] SPEAKER_02: As you already put, we were 44.32% in dollar terms and local currencies were up just about 18%.
[13:15] SPEAKER_02: Very strong performance first year.
[13:17] SPEAKER_02: We rolled in on four key reasons why that performance was that exemplary.
[13:24] SPEAKER_02: The first one was that there was,
[13:26] SPEAKER_02: what I would like to see,
[13:27] SPEAKER_02: very significant positive investor sentiment with regard to our country,
[13:33] SPEAKER_02: especially on the back of Kenya.
[13:36] SPEAKER_02: Our country is taking the June 24, the euro bond that was due.
[13:40] SPEAKER_02: That sent a very positive signal to the market.
[13:43] SPEAKER_02: And that uptick was actually fairly sustained because we could also look,
[13:49] SPEAKER_02: see the flows were primarily foreign flows that were supporting the market.
[13:53] SPEAKER_02: So that was one key thing.
[13:54] SPEAKER_02: The second one was the appreciation of the cash and shilling at least underneath the dollar.
[13:59] SPEAKER_02: You will remember how things went in the first half of the year as far as the shilling performance went.
[14:05] SPEAKER_02: And of course, that was also coupled with the availability of
[14:10] SPEAKER_02: USD, both in terms of access as well as ability to report it.
[14:14] SPEAKER_02: So that also contributed to that.
[14:16] SPEAKER_02: And then number three,
[14:17] SPEAKER_02: which I'm not sure it was very widely reported,
[14:20] SPEAKER_02: although I know Mongo did put it out there,
[14:22] SPEAKER_02: is in March 2024,
[14:25] SPEAKER_02: The Kenyan equity market received an upgrade on its classification.
[14:29] SPEAKER_02: So we were reclassified by the FTSE RASO Index Governance Board from restricted to path.
[14:35] SPEAKER_02: And this classification was followed on the back of a review that seeded an equity country.
[14:41] SPEAKER_02: an interim review of our equity market performance.
[14:44] SPEAKER_02: And the upgrade meant that traditional investors now could deploy capital in Kenya,
[14:49] SPEAKER_02: knowing that one,
[14:50] SPEAKER_02: they could access hard currency,
[14:52] SPEAKER_02: and more importantly,
[14:53] SPEAKER_02: they could income with it came to that.
[14:55] SPEAKER_02: And in fact, that was one of the key reasons why the reclassification happened.
[14:59] SPEAKER_02: So that really also buoyed the market because
[15:02] SPEAKER_02: Once you're reclassified within global indices,
[15:04] SPEAKER_02: then automatically capital starts flowing into your counter.
[15:07] SPEAKER_02: So that was an anarchy result.
[15:09] SPEAKER_02: The fourth one is the first half of this year,
[15:12] SPEAKER_02: actually our listed companies,
[15:13] SPEAKER_02: most of them had solid performance.
[15:15] SPEAKER_02: The previous year, that was 2023, you will have noted that there were quite a lot of profit warnings.
[15:22] SPEAKER_02: But actually the first half of this year, most listed companies saw improved performance.
[15:26] SPEAKER_02: They were projecting better results and they were actually delivering on those.
[15:30] SPEAKER_02: So of course that then supported confidence in the market.
[15:33] SPEAKER_02: So if you look at all four factors,
[15:35] SPEAKER_02: it goes without saying that there are concrete reasons why the first Africa VC and
[15:40] SPEAKER_02: the NAC absolutely blew expectations across Africa.
[15:44] SPEAKER_02: In fact,
[15:45] SPEAKER_02: if you follow some of those flows,
[15:47] SPEAKER_02: you can actually hear some of them move from other markets in Africa.
[15:52] SPEAKER_02: come to get allocated to the MEC.
[15:55] SPEAKER_02: So that's the position.
[15:57] SPEAKER_02: No doubt you will now talk about where we are and where we are headed.
[16:00] SPEAKER_02: That's a good segue maybe to discuss this.
[16:02] SPEAKER_02: The faster performance was pre-solid,
[16:04] SPEAKER_02: but since then,
[16:04] SPEAKER_02: as you can tell,
[16:05] SPEAKER_02: there's been a bit of a protest in the country around the finance bill.
[16:09] SPEAKER_02: And perhaps this has also been reflected in terms of our risk betted for investors,
[16:13] SPEAKER_02: especially when it comes to our local market.
[16:14] SPEAKER_02: The Eurobond yields have hit around 10%.
[16:17] SPEAKER_02: Investors seem to be a bit spooked by that.
[16:19] SPEAKER_02: And then today there was a downgrade by Moody's.
[16:21] SPEAKER_02: What's in mode and what's your read in terms of the foreign investors that you're
[16:25] SPEAKER_02: interacting with,
[16:25] SPEAKER_02: the local investors,
[16:26] SPEAKER_02: also in terms of the current situation in the country?
[16:29] SPEAKER_02: It's a good point.
[16:30] SPEAKER_02: Let me first start by saying there is no capital market anywhere in the world that
[16:35] SPEAKER_02: is not impacted by macros of the country or the jurisdictions within which it operates.
[16:42] SPEAKER_02: We are no different.
[16:43] SPEAKER_02: titles, headlines, macros, politics do impact markets and that's a known quantity.
[16:49] SPEAKER_02: How we work around that is a different conversation,
[16:52] SPEAKER_02: but no one here would be saying that they are going to any market anywhere in the
[16:56] SPEAKER_02: world that would be immune to these sort of issues.
[16:59] SPEAKER_02: The key thing to note is that an exchange like ours operates based on three key things.
[17:05] SPEAKER_02: The first one is investor confidence.
[17:08] SPEAKER_02: That investor confidence is both at the macro level as well as with regard to the
[17:11] SPEAKER_02: entities that are,
[17:13] SPEAKER_02: for example,
[17:14] SPEAKER_02: listed on our exchange.
[17:15] SPEAKER_02: So investor confidence is a key issue.
[17:17] SPEAKER_02: I will come back to that.
[17:18] SPEAKER_02: The second one is matters to do with policy certainty.
[17:22] SPEAKER_02: In jurisdiction or markets where there is no certainty or clarity around policy and
[17:28] SPEAKER_02: the direction of travel as far as policy matters is concerned,
[17:33] SPEAKER_02: you will usually find either they are not very robust market or you find a lot of
[17:38] SPEAKER_02: foreign investors don't come into that market because then they don't have the
[17:43] SPEAKER_02: gravity around policy matters.
[17:44] SPEAKER_02: So these are the second thing.
[17:46] SPEAKER_02: The ninth one, of course, is how well
[17:48] SPEAKER_02: we communicate market activity.
[17:50] SPEAKER_02: So traditionally,
[17:52] SPEAKER_02: the past you've had,
[17:53] SPEAKER_02: for example,
[17:54] SPEAKER_02: companies that are in our market issuing investor briefings,
[17:58] SPEAKER_02: providing annual reports and things like that.
[18:00] SPEAKER_02: But these days, there is more demand for granular market data.
[18:05] SPEAKER_02: So in an environment like where we are in now,
[18:14] SPEAKER_02: what we are championing is for companies to provide more regular,
[18:18] SPEAKER_02: more complete,
[18:20] SPEAKER_02: more accurate,
[18:20] SPEAKER_02: more timely marketing data.
[18:22] SPEAKER_02: Because then investors use that to take a decision and overlay that,
[18:27] SPEAKER_02: of course,
[18:27] SPEAKER_02: with the other alternative data on what's happening in our market.
[18:30] SPEAKER_02: Now, clearly, the developments over the last few weeks in our country have shaken investor confidence.
[18:36] SPEAKER_02: They have brought questions around policy certainty.
[18:40] SPEAKER_02: They have,
[18:40] SPEAKER_02: of course,
[18:41] SPEAKER_02: also identified gaps where tangible reforms are required,
[18:47] SPEAKER_02: including reforms that speak to policy.
[18:49] SPEAKER_02: matters capital markets.
[18:51] SPEAKER_02: And so our role at the NSC is to work with the larger capital market ecosystem,
[18:56] SPEAKER_02: as well as,
[18:57] SPEAKER_02: of course,
[18:57] SPEAKER_02: government and other stakeholders to see how to bring more policy certainty and
[19:03] SPEAKER_02: more clarity around matters reform,
[19:05] SPEAKER_02: as far as at least capital markets is concerned.
[19:07] SPEAKER_02: I'm not talking about political things.
[19:09] SPEAKER_02: On the back of that, the intention is also to push
[19:12] SPEAKER_02: our entities to do more robust investor engagement,
[19:17] SPEAKER_02: either through roadshows,
[19:18] SPEAKER_02: as I said,
[19:19] SPEAKER_02: more structured communication and deep relations.
[19:22] SPEAKER_02: My view is in the coming years,
[19:24] SPEAKER_02: we will be in a bit of a high economic position because obviously we have debt
[19:29] SPEAKER_02: obligations that need to be met.
[19:30] SPEAKER_02: You have seen the rating downgrade for sovereign, which means that access to capital will either be
[19:37] SPEAKER_02: more difficult or it will be more expensive.
[19:40] SPEAKER_02: I can imagine that the government is working very hard to come up with concrete responses to that.
[19:45] SPEAKER_02: But on our side,
[19:46] SPEAKER_02: the idea is to focus on what is within the control of the NFC,
[19:51] SPEAKER_02: which is primarily communicating to the market what opportunities exist.
[19:55] SPEAKER_02: nibbling easier access to the capital market,
[19:58] SPEAKER_02: especially through the NSE,
[20:00] SPEAKER_02: more market data and more market update to the investor community.
[20:04] SPEAKER_02: And of course, we are called upon to support the larger economic agenda.
[20:08] SPEAKER_02: I think as a closing point on that is to say what we want is to take feedback,
[20:13] SPEAKER_02: to take suggestions,
[20:15] SPEAKER_02: to take ideas from forums like this and use that to shift some of the initiatives
[20:21] SPEAKER_02: that we think are necessary to bring our market back.
[20:24] SPEAKER_02: At the end of the day,
[20:25] SPEAKER_02: I also want to say that we want to diversify a bit more away from relying on
[20:30] SPEAKER_02: trading revenues as an entity.
[20:33] SPEAKER_02: And also,
[20:33] SPEAKER_02: of course,
[20:33] SPEAKER_02: to deepen our local capital markets that will not necessarily have a huge chunk of
[20:38] SPEAKER_02: our necessarily only open to foreign investors.
[20:42] SPEAKER_02: We want more local investors to participate in our market.
[20:45] SPEAKER_02: And you will see that some of the initiatives we are going to push going forward as
[20:49] SPEAKER_02: we come up with a new strategy for which is 2025-2030.
[20:53] SPEAKER_02: Now that you've introduced the topic,
[20:55] SPEAKER_02: especially that of being in more local investors,
[20:57] SPEAKER_02: it's been something that you've suggested a lot to the NSE in terms of reducing
[21:01] SPEAKER_02: crisis on some of the products in terms of trading,
[21:04] SPEAKER_02: especially trading prices.
[21:06] SPEAKER_02: We've seen that in US markets where when you drive those prices to almost zero,
[21:10] SPEAKER_02: then you get this boost in volumes,
[21:12] SPEAKER_02: which can actually maybe compensate for that lost price.
[21:15] SPEAKER_02: Is this something that maybe you as a new CEO are thinking about?
[21:20] SPEAKER_02: Because it's also a
[21:21] SPEAKER_02: a way to boost trading and trading volumes at the NSE?
[21:23] SPEAKER_02: Maybe the way I should respond to that is to say the current strategy for the NSE is coming to an end.
[21:29] SPEAKER_02: It was 20.24.
[21:31] SPEAKER_02: And in fact, we've started the process for developing a new strategy for 20.25, 20.30.
[21:38] SPEAKER_02: That strategy should be ready for approval by the board in November this year.
[21:42] SPEAKER_02: So we have a bit of time to think through some of the things.
[21:45] SPEAKER_02: The intention is absolutely to look at all the tools that are in the toolbox that
[21:51] SPEAKER_02: can enable us to increase local participation and more specifically the retail market.
[21:56] SPEAKER_02: Now,
[21:56] SPEAKER_02: whether that's best done by looking at costs,
[21:59] SPEAKER_02: looking at debt,
[22:00] SPEAKER_02: and looking at the profit therefore coming into the market and affecting the market,
[22:05] SPEAKER_02: we can see,
[22:06] SPEAKER_02: I think those are all the things that we will look at.
[22:09] SPEAKER_02: I would like to say that from some of the background research we've been doing
[22:12] SPEAKER_02: around this,
[22:13] SPEAKER_02: market costs have been a feature.
[22:15] SPEAKER_02: Actually, accessibility in terms of affordability.
[22:18] SPEAKER_02: For example, I have a thousand shillings.
[22:20] SPEAKER_02: How can I participate in the market?
[22:22] SPEAKER_02: And more importantly, what should I even buy?
[22:25] SPEAKER_02: It appears to be the deeper issue.
[22:27] SPEAKER_02: So financially, the investor location is probably more relevant.
[22:31] SPEAKER_02: What I can say is, what we've seen other markets do specifically, the example is India.
[22:36] SPEAKER_02: What they've done is to, instead of trying to focus on just a pure individual, they've focused on a fund.
[22:43] SPEAKER_02: So for example, Mucho Fund.
[22:44] SPEAKER_02: So that way, my mom in my village doesn't have to think about which share to buy.
[22:50] SPEAKER_02: They just give the thousand shillings to a fat manager,
[22:53] SPEAKER_02: for example,
[22:53] SPEAKER_02: of Mucho Fund or a unit of produce like this.
[22:56] SPEAKER_02: And it is up to the professional to allocate capital accordingly.
[23:00] SPEAKER_02: And that then boosts trading volumes, provides the basis now to cut costs.
[23:05] SPEAKER_02: And of course,
[23:05] SPEAKER_02: to invest now in either more products or even more platforms that enable easier and
[23:10] SPEAKER_02: more affordable access to the game.
[23:12] SPEAKER_02: Look, there is no doubt that we have to absolutely get more retail participation, whatever it takes.
[23:19] SPEAKER_02: is what we will do.
[23:20] SPEAKER_02: But I think it is fair for us to be allowed to figure out what the right strategy is.
[23:25] SPEAKER_02: And then I think once we have that in place, you keep that to account in terms of execution.
[23:30] SPEAKER_02: Definitely.
[23:31] SPEAKER_02: So perhaps you can share a few more maybe high-level thoughts that you're having in
[23:34] SPEAKER_02: terms of attracting more people to invest in the NSE.
[23:37] SPEAKER_02: And what are some of the things that may be top of mind that you have?
[23:40] SPEAKER_02: You may not have tested them, but this is your early thoughts in the process.
[23:43] SPEAKER_02: Yes, the one that everyone would be aware of, and I would be surprised to see you do that,
[23:48] SPEAKER_02: wouldn't come up in the cooperation with around privatization or rather let me
[23:51] SPEAKER_02: start by saying clearly it's been quite a while since listings are primarily in the
[23:56] SPEAKER_02: main market have come through we've had listings in the alternative market for
[24:00] SPEAKER_02: example or other usp salary and quoted security platform in fact we are launching
[24:05] SPEAKER_02: one tomorrow morning at it this one we are announcing so so
[24:08] SPEAKER_02: So we want to move the needle around listings.
[24:12] SPEAKER_02: Now the question becomes, how do we do that?
[24:15] SPEAKER_02: There are three things we are thinking about.
[24:17] SPEAKER_02: The first one, of course, is around privatization.
[24:20] SPEAKER_02: So working closely with the government to figure out what entities could be brought
[24:26] SPEAKER_02: to market,
[24:27] SPEAKER_02: that is,
[24:27] SPEAKER_02: through the agency.
[24:29] SPEAKER_02: And more importantly,
[24:31] SPEAKER_02: doing that in a way that enables very widespread participation by the investor community,
[24:36] SPEAKER_02: both existing and new.
[24:37] SPEAKER_02: We are fairly confident that we will be having a listing coming through from our
[24:43] SPEAKER_02: provisional perspective.
[24:44] SPEAKER_02: I guess the conversation is it this year or next year.
[24:47] SPEAKER_02: And you probably are also aware that there is a battle in court that is challenging
[24:52] SPEAKER_02: some of the initiatives that were being done around privatization.
[24:55] SPEAKER_02: So until that is cleared,
[24:57] SPEAKER_02: I guess it's as good as mine.
[24:58] SPEAKER_02: So this privatization,
[24:59] SPEAKER_02: the second element we are looking at from a listing perspective is we have started
[25:04] SPEAKER_02: talking to private equity firms to see how we can support them to aggregate their
[25:09] SPEAKER_02: portfolio companies through our exchange.
[25:11] SPEAKER_02: And those conversations have started gathering momentum.
[25:13] SPEAKER_02: We think there is actually a significant number of credible candidates that can be
[25:18] SPEAKER_02: listed through our exchange from the,
[25:21] SPEAKER_02: let me call it the PE and DFI community.
[25:23] SPEAKER_02: And those portfolio companies tend
[25:25] SPEAKER_02: to be well-run, governed, so they present very good, credible targets for privatization.
[25:31] SPEAKER_02: In any event, the PE and DFI community has found it quite tough to exit through trade sales.
[25:37] SPEAKER_02: So then they are now seriously looking at this platform and we ourselves are
[25:42] SPEAKER_02: proactively engaging them to support them.
[25:44] SPEAKER_02: So that's the second category.
[25:47] SPEAKER_02: And that category is around family-owned businesses.
[25:51] SPEAKER_02: They are quite a number of very successful family-owned businesses that,
[25:56] SPEAKER_02: for example,
[25:57] SPEAKER_02: those that are going through next-gen issues,
[26:00] SPEAKER_02: transfer of businesses from one generation to another,
[26:02] SPEAKER_02: and where the next generation is not particularly keen to continue in that business.
[26:06] SPEAKER_02: And then the question becomes,
[26:07] SPEAKER_02: how do they secure their legacy and at the same time maybe continue to grow the business?
[26:12] SPEAKER_02: So we think that's a category that presents a good opportunity to potentially enlist through the NSE.
[26:17] SPEAKER_02: And again, we've started engaging a number of those.
[26:19] SPEAKER_02: I can't mention the names, but those are conversations we are also having.
[26:22] SPEAKER_02: And those cut across different sectors, including banking, manufacturing, and other sectors.
[26:29] SPEAKER_02: And then away from that structured product.
[26:32] SPEAKER_00: Frank,
[26:32] SPEAKER_00: maybe before you moved into the structured product,
[26:34] SPEAKER_00: you could be a taller question on me,
[26:36] SPEAKER_00: which I had maybe a bit on the potential listings.
[26:39] SPEAKER_00: We've been hosting a bit of the CEOs for a while here, especially from the NSE.
[26:43] SPEAKER_00: And oftentimes you get the promise, this always promise, it's coming, it's coming, it's coming.
[26:49] SPEAKER_00: I think it's been since 2014, if my statistics have me correctly here.
[26:54] SPEAKER_00: They're like, and there's been no new listing per se.
[26:57] SPEAKER_00: So what gives you that hope that this time is going to be different and so that the
[27:02] SPEAKER_02: investor can actually have that confidence that yes,
[27:04] SPEAKER_02: this time is actually different.
[27:06] SPEAKER_02: Okay.
[27:06] SPEAKER_02: So let's start by saying hope is not a strategy.
[27:09] SPEAKER_02: So I'm not here pushing hope.
[27:10] SPEAKER_02: The market is the market.
[27:11] SPEAKER_02: I think there are credible opportunities for little, they will come to the market.
[27:15] SPEAKER_02: If they are not there, they are not there.
[27:17] SPEAKER_02: I think I'm not here to say that I'm promising any listing because I can't do that.
[27:23] SPEAKER_02: What we are doing is positioning the budget proposition that NSE presents to
[27:28] SPEAKER_02: business owners,
[27:29] SPEAKER_02: whether those are in the private sector or in fact in government.
[27:32] SPEAKER_02: Let me clarify that from a government perspective.
[27:35] SPEAKER_02: Privatization is a policy decision that sits primarily within NT,
[27:40] SPEAKER_02: National Treasury,
[27:41] SPEAKER_02: and of course,
[27:42] SPEAKER_02: Privatization Commission,
[27:43] SPEAKER_02: among other stakeholders.
[27:44] SPEAKER_02: So that's a policy decision.
[27:46] SPEAKER_02: And unless the policy is aligned, no one here shall actually force anything.
[27:53] SPEAKER_02: The second thing is the private sector.
[27:55] SPEAKER_02: For the private sector, business owners have auctions.
[27:58] SPEAKER_02: They have auctions to sell their business to other private people.
[28:03] SPEAKER_02: They can refuse to invite that person into their business.
[28:07] SPEAKER_02: They can refuse to leave.
[28:09] SPEAKER_02: It is up to them.
[28:10] SPEAKER_02: So it is not the NAC.
[28:11] SPEAKER_02: And I don't know what other conversations have been had,
[28:13] SPEAKER_02: but there's no one here who should come promising you this thing.
[28:17] SPEAKER_02: That's not how it works.
[28:18] SPEAKER_02: Anywhere in the world, not just Kenya.
[28:20] SPEAKER_02: I think the key thing is to say, how does NAC work for me?
[28:24] SPEAKER_02: Any platform that makes it obvious that coming through the exchange and listing
[28:30] SPEAKER_02: through the NEC is the right decision.
[28:33] SPEAKER_02: That should be the conversation.
[28:35] SPEAKER_02: That's where we want ideas to enhance our platform to make it a compelling option.
[28:40] SPEAKER_02: The truth of the matter,
[28:41] SPEAKER_02: and I hope that's probably also quite clear from previous conversations,
[28:46] SPEAKER_02: exchanges everywhere around the world,
[28:48] SPEAKER_02: except,
[28:48] SPEAKER_02: for example,
[28:49] SPEAKER_02: in Middle East.
[28:50] SPEAKER_02: places Saudi and Qatar are all actually experiencing lifting drought.
[28:54] SPEAKER_02: So what most exchanges are doing,
[28:56] SPEAKER_02: and we as NEC are doing in the same way,
[28:58] SPEAKER_02: is to deconstruct shadow pollution.
[29:00] SPEAKER_02: So that's why we are going to talk about what we are doing around things like RIC,
[29:05] SPEAKER_02: things like the Unquoted Facilities Platform,
[29:08] SPEAKER_02: working capital solutions,
[29:09] SPEAKER_02: and things like that.
[29:10] SPEAKER_02: Unless we have a competitive platform that makes coming through the NEC attractive,
[29:17] SPEAKER_02: of course,
[29:17] SPEAKER_02: I can't keep promising you all sorts of things,
[29:21] SPEAKER_02: which I have no intention of doing.
[29:23] SPEAKER_02: I think the other thing to mention, there are different reasons entities come to an exchange.
[29:28] SPEAKER_02: They can come to the exchange to raise capital.
[29:30] SPEAKER_02: They can come to the exchange to agree to get liquidity.
[29:33] SPEAKER_02: So I want 100%, I want to sell 30%.
[29:36] SPEAKER_02: So I'm not raising capital.
[29:37] SPEAKER_02: All I want really is to get liquidity for my share.
[29:39] SPEAKER_02: Or in fact,
[29:40] SPEAKER_02: they can come to the exchange for other reasons,
[29:42] SPEAKER_02: for example,
[29:43] SPEAKER_02: to build their brand profile and use that as a springboard to other things.
[29:47] SPEAKER_02: So there are different reasons to come to the exchange.
[29:50] SPEAKER_02: So again, we want to create a compelling platform that speaks to those sorts of issues.
[29:55] SPEAKER_02: That way,
[29:56] SPEAKER_02: the conversation becomes more about who else is doing it better and how are we
[30:00] SPEAKER_02: competing with them,
[30:02] SPEAKER_02: rather than where are the listings,
[30:03] SPEAKER_02: where are the listings,
[30:04] SPEAKER_02: where are the listings.
[30:05] SPEAKER_02: In any event,
[30:06] SPEAKER_02: I think we still have not struck the surface as far as ensuring robust market
[30:10] SPEAKER_02: activity on our enlisted account.
[30:12] SPEAKER_02: So maybe now you could move on to telling us a bit about some of the products that
[30:16] SPEAKER_02: you have in mind for the young and new investors.
[30:19] SPEAKER_02: Before I ask you a couple more questions and then we open the spaces for the audience.
[30:23] SPEAKER_02: The first thing I just wanted to underscore was around our intention to really
[30:28] SPEAKER_02: think through and deliver on increasing retail participation in our existing market.
[30:33] SPEAKER_02: I mentioned that one of the things we are looking at,
[30:35] SPEAKER_02: for example,
[30:36] SPEAKER_02: is how to enable affordable in-the-up rate to
[30:41] SPEAKER_02: Our counter, the fractional trading is one of the things we are thinking about.
[30:45] SPEAKER_02: The second one is how to use our digital platforms to get to just about everyone
[30:51] SPEAKER_02: anywhere in the country,
[30:52] SPEAKER_02: if not beyond our country.
[30:54] SPEAKER_02: For example, we are looking at how to revamp a mobile offering.
[30:58] SPEAKER_02: because we think that's a key channel for enabling liquidity to come to our market.
[31:04] SPEAKER_02: We are also keen to look at the settlement cycles so that we see whether we can
[31:11] SPEAKER_02: shorten the time it takes to enter the market and to exit,
[31:15] SPEAKER_02: so that then that makes it much easier for one to say,
[31:18] SPEAKER_02: I'm using the NSE to invest,
[31:20] SPEAKER_02: but at the same time,
[31:21] SPEAKER_02: when I need my money,
[31:22] SPEAKER_02: I can quickly access it.
[31:24] SPEAKER_02: So there's that element of it on the ETC side.
[31:27] SPEAKER_02: And coupled with that,
[31:28] SPEAKER_02: we plan to also roll out financial literacy investor education programs in
[31:34] SPEAKER_02: collaboration with other capital market participants.
[31:36] SPEAKER_02: For example,
[31:37] SPEAKER_02: the Capital Market Authority,
[31:39] SPEAKER_02: the ISTIFA,
[31:41] SPEAKER_02: the CASIB,
[31:42] SPEAKER_02: that's the Kenya Association of Stockbrokers,
[31:44] SPEAKER_02: and the investment bank ETC.
[31:47] SPEAKER_02: So that's on the retail side.
[31:49] SPEAKER_02: The second thing is to bring new product.
[31:52] SPEAKER_02: One of the things that we are working on is working capital solution,
[31:57] SPEAKER_02: because we think that as much as,
[31:58] SPEAKER_02: for example,
[31:59] SPEAKER_02: SMEs might find it tough to meet the requirement to list 100 million as an example,
[32:05] SPEAKER_02: or in fact,
[32:05] SPEAKER_02: even the unquoted platform,
[32:07] SPEAKER_02: there is an opportunity for us
[32:08] SPEAKER_02: to create a marketplace for them to access working capital solution.
[32:13] SPEAKER_02: Whether that's things like invoice discounting, disservice chain, etc.
[32:18] SPEAKER_02: That for now,
[32:19] SPEAKER_02: we support a need that the market ask for a special point to be,
[32:24] SPEAKER_02: and then you can graduate with time to more compact solution.
[32:28] SPEAKER_02: We are also pushing to build up our derivatives market.
[32:32] SPEAKER_02: It was launched a few years ago.
[32:34] SPEAKER_02: We've seen some art in activity, but we want to enhance that a bit more.
[32:40] SPEAKER_02: So you will see us putting more effort in our derivative offering.
[32:45] SPEAKER_02: Then there are considerations on how we respond to matters of climate change.
[32:51] SPEAKER_02: For example,
[32:52] SPEAKER_02: inviting issuers of green bonds,
[32:55] SPEAKER_02: impact bonds,
[32:56] SPEAKER_02: and other sustainability-linked instruments,
[33:00] SPEAKER_02: because we have actually noted that there is quite a lot of liquidity brought
[33:05] SPEAKER_02: within our borders and outside our borders,
[33:07] SPEAKER_02: but it's not finding its way into the right product or rather project.
[33:12] SPEAKER_02: Because either the projects are not bankable or the mechanism for channeling
[33:16] SPEAKER_02: capital to them doesn't exist.
[33:18] SPEAKER_02: So we want to play the role to unlock that.
[33:21] SPEAKER_02: And I'm quite clear that we don't have a liquidity issue.
[33:25] SPEAKER_02: What we have is in the sense that the money is there,
[33:28] SPEAKER_02: but the opportunities are not coming through that permit.
[33:31] SPEAKER_02: the requirements of the capital providers.
[33:33] SPEAKER_02: And then we are also thinking about bringing structured instruments,
[33:38] SPEAKER_02: for example,
[33:39] SPEAKER_02: exchange-traded funds,
[33:40] SPEAKER_02: ETFs.
[33:41] SPEAKER_02: We are in discussions around bringing more indices to our market.
[33:45] SPEAKER_02: We are in discussions to consider cross-listing and dual-listing from other markets to our market.
[33:51] SPEAKER_02: So that can then be the bouquet of opportunities that is available to different investors there.
[33:56] SPEAKER_02: I'll mention about two months ago,
[33:58] SPEAKER_02: my third,
[33:59] SPEAKER_02: our chair,
[34:00] SPEAKER_02: chairman of our board,
[34:01] SPEAKER_02: and two other colleagues from many other roadshows were in the UK for a week
[34:06] SPEAKER_02: meeting large,
[34:07] SPEAKER_02: large fund managers.
[34:08] SPEAKER_02: And on our way there, what we thought was we have a demand issue.
[34:13] SPEAKER_02: In other words, that we would have to do a lot of convincing for these investors to come to our market.
[34:18] SPEAKER_02: We ended up with a water supply issue.
[34:20] SPEAKER_02: We don't really have problems with fund managers,
[34:23] SPEAKER_02: especially fund managers wanting to deploy capital into our market.
[34:27] SPEAKER_02: What we have is a supply issue.
[34:29] SPEAKER_02: The variety and the sophistication of products that they are looking for does not exist.
[34:35] SPEAKER_02: So our capital market ecosystem needs,
[34:37] SPEAKER_02: including the people who score,
[34:39] SPEAKER_02: need to see the opportunity to actually bring innovative products to the market.
[34:44] SPEAKER_02: They have to take care.
[34:45] SPEAKER_02: It's just a question of structuring things properly and of course bringing them in
[34:49] SPEAKER_02: the NSE,
[34:50] SPEAKER_02: but of course taking the right compliance and regulatory boxes that these investors
[34:54] SPEAKER_02: look for.
[34:55] SPEAKER_02: I do think as a closing point to that point,
[34:57] SPEAKER_02: Mukai,
[34:57] SPEAKER_02: you will be seeing going forward,
[34:59] SPEAKER_02: you will be seeing the NSC pushing innovative products.
[35:02] SPEAKER_02: You will see the NSC looking to engage more with the ecosystem to get ideas that we
[35:08] SPEAKER_02: can then work together on to bring to market.
[35:10] SPEAKER_02: And you will be seeing us wanting to take the market to the master so that then
[35:16] SPEAKER_02: every person has a fair chance of participating in the market and,
[35:20] SPEAKER_02: of course,
[35:21] SPEAKER_02: enjoying the benefits that come with that.
[35:23] SPEAKER_02: I see a couple of requests to ask questions.
[35:27] SPEAKER_02: So I'll let one or two people in a few.
[35:29] SPEAKER_02: So a quick guide on how to get in your questions.
[35:31] SPEAKER_02: So you can either DM us your questions and then we'll get to read them out to Frank.
[35:36] SPEAKER_02: The second way you can do it is just go to a pinned tweet and just below it, you can write down.
[35:40] SPEAKER_02: the questions that you have, and then you'll be able to take them up.
[35:42] SPEAKER_02: And then the third way is to request and then to speak.
[35:46] SPEAKER_02: Usually if you're requesting to speak,
[35:48] SPEAKER_02: we do not admit accounts,
[35:50] SPEAKER_02: which we do not know much about,
[35:51] SPEAKER_02: just to make sure that the conversations are high level.
[35:53] SPEAKER_02: As I try to get one or two people to speak, a couple of questions.
[35:57] SPEAKER_02: So one for Frank is about the NSE data.
[36:02] SPEAKER_00: I think the data is quite expensive, especially for low cost.
[36:05] SPEAKER_00: A couple of times I've tried to get it myself.
[36:07] SPEAKER_00: I found it very prohibitive in terms of the pricing.
[36:10] SPEAKER_00: It's something that you could also maybe include in your strategic plan going
[36:13] SPEAKER_02: forward so that you can also make it a bit affordable,
[36:15] SPEAKER_02: especially for local investors.
[36:17] SPEAKER_02: I like that.
[36:18] SPEAKER_02: Look,
[36:18] SPEAKER_02: the first bit is to say that we recognize that markets like ours cannot grow and
[36:24] SPEAKER_02: more innovation cannot come to the market unless we enable wider access to market
[36:30] SPEAKER_02: data and more importantly,
[36:31] SPEAKER_02: data that is usable.
[36:33] SPEAKER_02: Now we have different tiers currently.
[36:36] SPEAKER_02: And the way we've been managing our data side of the,
[36:41] SPEAKER_02: to be fair,
[36:42] SPEAKER_02: been primarily focused on selecting institutional clients.
[36:46] SPEAKER_02: That said, we've taken this feedback.
[36:48] SPEAKER_02: It's actually come up in a number of other forums as well.
[36:51] SPEAKER_02: We do intend to absolutely...
[36:54] SPEAKER_02: look at that and see how to make data a lot more readily available.
[36:59] SPEAKER_02: The process that we are undergoing as part of our new strategy,
[37:03] SPEAKER_02: coming up with our new strategy,
[37:05] SPEAKER_02: includes actually how to not just sell data,
[37:09] SPEAKER_02: but also provide analytical capability for that.
[37:12] SPEAKER_02: What you might end up actually subscribing to is more of an insight as opposed to
[37:17] SPEAKER_02: just the raw data,
[37:18] SPEAKER_02: but that will be there.
[37:19] SPEAKER_02: But we take your point.
[37:20] SPEAKER_02: It's been raised also before, so I know this is a real issue.
[37:23] SPEAKER_02: And we will look at that.
[37:25] SPEAKER_02: In any event,
[37:25] SPEAKER_02: we think that we can't really drive the larger retail market,
[37:29] SPEAKER_02: for example,
[37:30] SPEAKER_02: unless we solve for this issue around data.
[37:32] SPEAKER_02: So we will do.
[37:33] SPEAKER_02: We will look into that.
[37:34] SPEAKER_02: All right.
[37:35] SPEAKER_02: One more thing before I allow maybe some two speakers I've allowed here to come and ask questions.
[37:39] SPEAKER_02: One is on the earnings calendar.
[37:41] SPEAKER_02: So there's something that we've been asking a lot from the NSE.
[37:44] SPEAKER_02: We do compile some of the companies that tell us like now EABL and BAT are supposed
[37:49] SPEAKER_02: to report their,
[37:50] SPEAKER_02: I think,
[37:51] SPEAKER_02: half year results towards the end of this month.
[37:52] SPEAKER_02: So we have an investor calendar on some of the events that are coming up.
[37:55] SPEAKER_02: But we haven't seen that directly from the NSE.
[37:58] SPEAKER_02: And especially because at the NSE,
[37:59] SPEAKER_02: you have direct access to most of the investor relations departments of all these
[38:03] SPEAKER_02: 50 plus companies you engage with.
[38:05] SPEAKER_02: It's possible to get all this data in advance and maybe ask and push companies to tell us.
[38:10] SPEAKER_02: Banks are doing their earnings calls next month, but by now they should have a bit of a feel on when
[38:16] SPEAKER_02: the date and B.
[38:17] SPEAKER_02: So they can give you a bit of a probable date for some of the reporting for
[38:21] SPEAKER_02: earnings so that we know when to expect.
[38:23] SPEAKER_02: It's been like you wake up early in the morning and you find the information is just in the papers.
[38:29] SPEAKER_02: I think for a more structured market, we also need to have a structured way of releasing information.
[38:34] SPEAKER_02: And I think the earnings calendar is one key component of that.
[38:37] SPEAKER_02: So we do compile for ourselves,
[38:38] SPEAKER_02: but would then maybe consider having an earnings calendar,
[38:41] SPEAKER_02: estimated dates for earnings and all that.
[38:43] SPEAKER_02: Frank, you are absolutely 100%.
[38:46] SPEAKER_02: First,
[38:47] SPEAKER_02: let me start by saying that,
[38:49] SPEAKER_02: of course,
[38:49] SPEAKER_02: in order to plan and make accurate investment decisions,
[38:53] SPEAKER_02: access to information is a key element to that.
[38:56] SPEAKER_02: So we are fully aligned on that.
[38:58] SPEAKER_02: I would say most major exchanges around the world, all of them actually do provide an exchange calendar.
[39:03] SPEAKER_02: So we would be amiss not to do that.
[39:05] SPEAKER_02: There are four interventions that we've done with Mukai.
[39:09] SPEAKER_02: The first one,
[39:10] SPEAKER_02: C-listed companies will be sharing information on the intent to announce material information.
[39:17] SPEAKER_02: So we've made a request to all listed companies,
[39:20] SPEAKER_02: the compliance team to those listed companies,
[39:22] SPEAKER_02: to share with us.
[39:24] SPEAKER_02: dates when the companies will share material information,
[39:26] SPEAKER_02: including financial announcements with the NEC in advance so that the NEC can then
[39:30] SPEAKER_02: share that with the market.
[39:32] SPEAKER_02: And going forward,
[39:33] SPEAKER_02: that information will be published on our website for investors to actually interact,
[39:36] SPEAKER_02: of course,
[39:37] SPEAKER_02: in line with their investment needs.
[39:39] SPEAKER_02: So that's one of these, and you can hold us to that.
[39:42] SPEAKER_02: The second one is support for listed companies to undertake and publicize investor
[39:47] SPEAKER_02: precincts or investor calls.
[39:50] SPEAKER_02: So the intention is for us as NSE to require listed companies,
[39:53] SPEAKER_02: given NSE is also regular,
[39:56] SPEAKER_02: to push for listed companies to start sharing information on investor calls.
[40:00] SPEAKER_02: on our website,
[40:02] SPEAKER_02: on our social media handles,
[40:03] SPEAKER_02: and also to push that out to our investor community so that if at any given time
[40:07] SPEAKER_02: you want to know whether there are companies that you are interested in that,
[40:11] SPEAKER_02: whether they have investor quotes,
[40:13] SPEAKER_02: you can come to our website or the NSE social media handle and add a mail listing
[40:18] SPEAKER_02: from the NSE and you'll get that information.
[40:19] SPEAKER_02: The third one is we want to work towards developing a terminal that will enable us
[40:26] SPEAKER_02: to share our critical information about the company development.
[40:29] SPEAKER_02: And we can push that information to either some of the terminals back or let's say
[40:35] SPEAKER_02: some of the market data and other co-production forums that use,
[40:39] SPEAKER_02: for example,
[40:40] SPEAKER_02: I said Bloomberg or Reuters or something like that.
[40:43] SPEAKER_02: So,
[40:43] SPEAKER_02: NSE is working towards procuring or if not procuring,
[40:48] SPEAKER_02: we'll develop a term that will enable us to directly share critical information
[40:52] SPEAKER_02: with both domestic and international investors.
[40:54] SPEAKER_02: So,
[40:54] SPEAKER_02: in that sense,
[40:55] SPEAKER_02: we think that one or seven of the listed entities and of course,
[40:59] SPEAKER_02: other capital market players can actually then be able to push out information
[41:04] SPEAKER_02: around
[41:05] SPEAKER_02: our listed entities and then in that way we close this information as far as other
[41:12] SPEAKER_02: corporate actions that would be relevant for investment in the club.
[41:16] SPEAKER_02: I think it is also important to mention that quite a lot of our entities
[41:22] SPEAKER_02: still have work to do to develop robust investor relations, as we said.
[41:27] SPEAKER_02: I should mention NSE itself is listed on ZonExchange.
[41:30] SPEAKER_02: So we are also a listed entity and we are shareholder.
[41:33] SPEAKER_02: So some of the points I'm making here,
[41:36] SPEAKER_02: if not all of them,
[41:37] SPEAKER_02: also but us as a listed entity because we are a PLC ourselves.
[41:42] SPEAKER_02: But the point I was making is that there will be interventions that will be pushing
[41:46] SPEAKER_02: to grow the investor initials across the listed entity,
[41:50] SPEAKER_02: including ourselves as one of them.
[41:53] SPEAKER_00: You're on point there.
[41:54] SPEAKER_00: In terms of best practices, an earnings calendar should be a basic.
[41:57] SPEAKER_00: And then also something you've talked about, the NSE itself setting the pace.
[42:00] SPEAKER_00: I think today is when we saw the CMA itself releasing the FY2022-23 earnings.
[42:05] SPEAKER_00: That shouldn't be the case, I think.
[42:09] SPEAKER_00: As regulators listing place,
[42:10] SPEAKER_00: you should be like the one setting the trend in terms of,
[42:13] SPEAKER_00: okay,
[42:14] SPEAKER_00: this is our calendar for this year.
[42:15] SPEAKER_02: We expect to engage with you this day.
[42:17] SPEAKER_02: And then we expect to release earnings.
[42:19] SPEAKER_02: Perhaps this date and this date, it can change, but it's okay to change.
[42:22] SPEAKER_02: But at least you've given investors expectations.
[42:25] SPEAKER_02: Like around this week is when we can expect earnings.
[42:27] SPEAKER_02: So if you look like at the US market, the Q2.
[42:30] SPEAKER_02: closed last week.
[42:31] SPEAKER_02: We expect this Friday bank earnings to start.
[42:34] SPEAKER_02: So it's a expectation.
[42:35] SPEAKER_02: It doesn't have to be perfect.
[42:37] SPEAKER_02: As things change, of course, it's okay to communicate.
[42:40] SPEAKER_02: That's what you're looking at from the exchange here.
[42:42] SPEAKER_02: It's usually just calling the IR and telling them, hey, when can we expect results for the next month?
[42:46] SPEAKER_02: And we do that a lot at Well.
[42:48] SPEAKER_02: I think that's a role that you guys have more exposure in terms of data,
[42:52] SPEAKER_02: network and connections to be able to do that a bit better.
[42:55] SPEAKER_02: So thanks for listening on that point.
[42:56] SPEAKER_02: And of course, we will be checking up
[42:59] SPEAKER_02: then I see a bit and poking you guys a bit more.
[43:02] SPEAKER_02: To take feedback and to actually more important work on it and be kept accountable.
[43:07] SPEAKER_02: What I do think also it's important to realize that investor confidence will not bring itself.
[43:14] SPEAKER_02: In other words,
[43:15] SPEAKER_02: It won't happen organically.
[43:16] SPEAKER_02: It is forums like this and participants in forums like this that need to also take
[43:22] SPEAKER_02: the responsibility to articulate the opportunities that exist in our market.
[43:26] SPEAKER_02: Because remember,
[43:28] SPEAKER_02: if you have invested in the NSE,
[43:30] SPEAKER_02: in entities around the NSE,
[43:32] SPEAKER_02: and as an example,
[43:33] SPEAKER_02: you want to earn it,
[43:34] SPEAKER_02: what you want is to have a ready buyer as an example.
[43:37] SPEAKER_02: Now that won't happen if in fact the market is not robust.
[43:41] SPEAKER_02: So it is also in your interest to articulate what the opportunities are,
[43:45] SPEAKER_02: to educate more people about how this market works,
[43:47] SPEAKER_02: for those of you that understand how the market works,
[43:49] SPEAKER_02: and to also keep us accountable,
[43:51] SPEAKER_02: but at the same time,
[43:53] SPEAKER_02: where the good things happen,
[43:54] SPEAKER_02: to beat the draft for that.
[43:56] SPEAKER_02: I think it should not go...
[43:58] SPEAKER_02: I noticed that there has been a lot of evolution that has also happened in the capital market.
[44:03] SPEAKER_02: I think just an issue of how to articulate that so that everyone is a bit more aware of it.
[44:08] SPEAKER_02: I have seen quite a lot of innovation around products.
[44:11] SPEAKER_02: I've seen a lot of innovation around regulation.
[44:13] SPEAKER_02: I've seen a lot of support coming,
[44:15] SPEAKER_02: for example,
[44:15] SPEAKER_02: from the capital market authority asking for inputs on that people wanted
[44:20] SPEAKER_02: improvement done.
[44:21] SPEAKER_02: We have responsibility for that because the market needs you as much as you need it.
[44:26] SPEAKER_02: So I'm taking the responsibility to be kept accountable,
[44:29] SPEAKER_02: but also asking that you also,
[44:31] SPEAKER_02: as a community,
[44:32] SPEAKER_02: take responsibility and step up as far as enabling the market to work in an orderly manner.
[44:38] SPEAKER_02: Yes, definitely.
[44:38] SPEAKER_02: We have an attentive earnings calendar, at least for Q2.
[44:41] SPEAKER_02: Banks, we expect them to do their earnings the next month.
[44:44] SPEAKER_02: We have a rolling calendar also, which we mostly adopted from Bank of America.
[44:48] SPEAKER_02: I see so many questions for you, by the way.
[44:50] SPEAKER_02: One is wishing you all the best.
[44:51] SPEAKER_02: I think he likes that you're really listening to little investors and incorporating them.
[44:55] SPEAKER_00: And another two or three here and there,
[44:56] SPEAKER_00: I think we may need to host the CDSC at some point because there are lots of people
[45:00] SPEAKER_00: asking how to open a CDS account.
[45:02] SPEAKER_00: Any top-level comments on that, Frank?
[45:04] SPEAKER_00: Maybe we need to go a step further with NSC and CDSC on how to open an account.
[45:10] SPEAKER_02: You're right.
[45:11] SPEAKER_02: CDSC is a key component of the capital market, the NSC component.
[45:16] SPEAKER_02: They like the shareholder actually within the NCGSE.
[45:19] SPEAKER_02: So it's also important for us that works correctly.
[45:22] SPEAKER_02: My commitment to this forum is that we are happy to take all these questions and
[45:26] SPEAKER_02: actually respond to them through you,
[45:28] SPEAKER_02: but also if we need to have another session.
[45:31] SPEAKER_02: But as far as opening accounts is concerned, I think that should be a fair and straightforward process.
[45:36] SPEAKER_02: But let me have a conversation with my team just to confirm what's what so that
[45:41] SPEAKER_02: they don't respond out of time.
[45:43] SPEAKER_00: Yeah, definitely.
[45:43] SPEAKER_00: Fortune, you're quite active in the markets.
[45:46] SPEAKER_00: Any questions for the speaker?
[45:47] SPEAKER_00: Yes.
[45:48] SPEAKER_00: Keep it short.
[45:48] SPEAKER_00: Yes.
[45:49] SPEAKER_00: My question is, the NSE, the issue is still about raising the capital.
[45:53] SPEAKER_00: My question is the CEO,
[45:55] SPEAKER_00: can he consider maybe taking the tech companies maybe to the NSE because we are
[46:00] SPEAKER_00: waiting for that?
[46:01] SPEAKER_00: All right.
[46:01] SPEAKER_00: Thank you for that.
[46:02] SPEAKER_00: Frank, I think that's also a good segue to discuss AI and the impact it's having on markets.
[46:08] SPEAKER_00: Do you have a plan for that to help maybe the tech companies in Kenya to consider
[46:12] SPEAKER_02: listing at the NSE or so?
[46:13] SPEAKER_02: Thanks for that question.
[46:15] SPEAKER_02: You see, your question actually confirms that we don't have a demand issue, the supply issue.
[46:21] SPEAKER_02: There are two elements to Fortune's question.
[46:24] SPEAKER_02: I think the first one is actually bringing tech companies to list or to interact with our platform.
[46:30] SPEAKER_02: And those could be big tech companies as well as,
[46:33] SPEAKER_02: of course,
[46:34] SPEAKER_02: what I can mention,
[46:35] SPEAKER_02: Fortune,
[46:35] SPEAKER_02: is that in earth crafting our new strategy,
[46:38] SPEAKER_02: this is one of the segments we are looking to activate.
[46:41] SPEAKER_02: The other day we had a meeting with the FinTech Association,
[46:44] SPEAKER_02: discussing with them potential opportunities for us to support their members to
[46:50] SPEAKER_02: raise capital through our platform.
[46:54] SPEAKER_02: Including whether there is need for us to create a special board and by board a
[47:00] SPEAKER_02: special market segment to enable them.
[47:03] SPEAKER_02: Let me call them startups who come to our exchange,
[47:07] SPEAKER_02: of course,
[47:07] SPEAKER_02: with all the relevant information as well as risk disclosure.
[47:11] SPEAKER_02: That, of course, is also big tech companies, that's all these startups.
[47:15] SPEAKER_02: Those fall within the category that I had discussed,
[47:19] SPEAKER_02: Fortune,
[47:19] SPEAKER_02: where we are looking at portfolio companies owned by the firms,
[47:23] SPEAKER_02: as well as some family-owned businesses.
[47:25] SPEAKER_02: Separate to that fortune,
[47:26] SPEAKER_02: we are having discussions on bringing in either ETFs or indices that reference tech
[47:35] SPEAKER_02: businesses globally.
[47:36] SPEAKER_02: For example,
[47:37] SPEAKER_02: how do we enable you,
[47:38] SPEAKER_02: if you want,
[47:39] SPEAKER_02: for example,
[47:39] SPEAKER_02: to invest in Meta or Google or Media or Microsoft,
[47:42] SPEAKER_02: how you do that pure and simple through our exchange without having to open
[47:47] SPEAKER_02: accounts in the primary market.
[47:49] SPEAKER_02: In fact, we do it cross-border.
[47:52] SPEAKER_02: And they are instruments to do that.
[47:54] SPEAKER_02: You have things like it could be an index,
[47:56] SPEAKER_02: it could be an ETF,
[47:57] SPEAKER_02: it could be a depository receipt and among other mechanisms.
[48:01] SPEAKER_02: So we are looking at that now.
[48:02] SPEAKER_02: That is more on the market side.
[48:04] SPEAKER_02: In terms of embracing technology,
[48:06] SPEAKER_02: our new strategy will definitely look at how to take on emerging tech to support
[48:12] SPEAKER_02: our customers better.
[48:13] SPEAKER_02: whether that's to do with AI, blockchain, advanced data analytics, and things like this.
[48:19] SPEAKER_02: I know one of the things that is very relevant to the market world these days is
[48:25] SPEAKER_02: the market's view of digital assets and tokenization.
[48:28] SPEAKER_02: And so those are things that we will actually
[48:31] SPEAKER_02: think to bring to our market.
[48:33] SPEAKER_02: And we think those are new opportunities, especially as far as deepening our market growth.
[48:38] SPEAKER_02: So the short answer for you is yes.
[48:40] SPEAKER_02: What I think is important is if you do have ideas and you'd want to collaborate
[48:46] SPEAKER_02: with us,
[48:46] SPEAKER_02: please,
[48:46] SPEAKER_02: we are open.
[48:47] SPEAKER_02: So feel free to reach out.
[48:49] SPEAKER_02: I hope that addresses your point.
[48:51] SPEAKER_00: Thanks.
[48:51] SPEAKER_00: Well, a couple of other questions here.
[48:53] SPEAKER_00: So one is raising a question about listing loss making parastatums because there's
[48:58] SPEAKER_00: some of those that have been fronted to be listed.
[49:00] SPEAKER_00: It's also asking, we may not have perhaps a quantity problem in terms of listings.
[49:05] SPEAKER_00: It could be also a quality problem because...
[49:07] SPEAKER_00: If you're going to bring something after that gap of around 10 plus years of no
[49:11] SPEAKER_00: good listing at the NSE,
[49:12] SPEAKER_00: I think it needs to be high quality.
[49:14] SPEAKER_00: So perhaps over to you, maybe to surprise us with one lovely high quality listing.
[49:19] SPEAKER_00: I think the pressure is that the fast listing needs to be something like that's the market a bit.
[49:24] SPEAKER_00: Because I remember back in 2008 when Safaricom was listing, there was this huge vibrancy.
[49:29] SPEAKER_00: I was in university back then and I could sense even in the university,
[49:32] SPEAKER_00: people were really excited about investing the NSE in Safaricom and all.
[49:36] SPEAKER_02: And of course we got banned when it went to two shillings from five shillings back then,
[49:40] SPEAKER_00: but now it's around 17,
[49:42] SPEAKER_00: if you had held on.
[49:43] SPEAKER_00: But I think it raises that component of,
[49:45] SPEAKER_00: okay,
[49:45] SPEAKER_00: the quality of leasing also needs to be good,
[49:47] SPEAKER_02: not just loss-making perspective.
[49:49] SPEAKER_02: Any comment on that, Frank, before I move to other questions?
[49:52] SPEAKER_02: As far as listings from the government is concerned,
[49:55] SPEAKER_02: the intention is to work with government to bring to market profit-making lifestyle issue.
[50:01] SPEAKER_02: So the intention is not to bring poor-performing assets to market.
[50:04] SPEAKER_02: I think that doesn't sit well with the government.
[50:07] SPEAKER_02: It doesn't sit well with the investor community.
[50:09] SPEAKER_02: Neither does it sit well with us.
[50:10] SPEAKER_02: And I do not think that the policy of the government is to use a platform like this one to...
[50:17] SPEAKER_02: remove some of these entities out of their books and dump them on the community.
[50:22] SPEAKER_02: Probably the uptake will not be there.
[50:23] SPEAKER_02: However, there is a point there, which is this.
[50:26] SPEAKER_02: You know, you take a loss-making business from the public sector.
[50:31] SPEAKER_02: Yes, it is loss-making.
[50:32] SPEAKER_02: Bring it to the market,
[50:33] SPEAKER_02: put it in the hands of the private sector,
[50:36] SPEAKER_02: and the private sector turns it around and becomes not just profitable,
[50:40] SPEAKER_02: but an advantage in the sector.
[50:41] SPEAKER_02: So there is also that co-op dot.
[50:44] SPEAKER_02: Now,
[50:44] SPEAKER_02: there is,
[50:44] SPEAKER_02: of course,
[50:45] SPEAKER_02: related to that question about whether the entities that come to market can
[50:49] SPEAKER_02: actually be turned around if they were loss making and whether,
[50:52] SPEAKER_02: in fact,
[50:53] SPEAKER_02: bringing them to the market before they are turned around is the way to go.
[50:56] SPEAKER_02: There are stock measures around that.
[50:57] SPEAKER_02: You can have a structured approach where you privatize it, but not through the exchange.
[51:01] SPEAKER_02: You prepare it, it becomes profitable, then you list it.
[51:04] SPEAKER_02: And that could be profitable.
[51:05] SPEAKER_02: one of the commitments of the privatization process.
[51:08] SPEAKER_02: But let's start with a policy decision made by the right people on what to prioritize.
[51:13] SPEAKER_02: Then we can have discussion on what comes to the end versus what doesn't.
[51:18] SPEAKER_02: But as I said, the intention is to only bring in profitable business.
[51:22] SPEAKER_02: Now,
[51:22] SPEAKER_02: as to whether your question also refers to companies that are loss-making,
[51:27] SPEAKER_02: that are already listed in our exchange,
[51:30] SPEAKER_02: I think there needs to be a separation between pure private sector companies and
[51:34] SPEAKER_02: companies that have some public sector component.
[51:37] SPEAKER_02: So the example I'll give there is, if you look at the KQ, which has a public sector element, versus
[51:43] SPEAKER_02: other entities, then there I think we need to talk about do the fundamentals of the business make sense?
[51:48] SPEAKER_02: Is it just a bump on the road or is it a governance issue?
[51:52] SPEAKER_02: Is it a macro issue?
[51:53] SPEAKER_02: Is it a business model issue?
[51:55] SPEAKER_02: It is simple.
[51:56] SPEAKER_02: ANSC works very closely with CME,
[51:58] SPEAKER_02: with the Capital Market Authority,
[52:00] SPEAKER_02: to respond to these sort of challenges.
[52:02] SPEAKER_02: But the truth is,
[52:03] SPEAKER_02: that is a bilateral conversation in the sense that you have to look at each entity
[52:07] SPEAKER_02: case by case and make a call on do we give them time to
[52:12] SPEAKER_02: get their affairs in order.
[52:13] SPEAKER_02: Do they even want to stay listed or do they want to delist themselves and get their
[52:18] SPEAKER_02: affairs in order and come back to the market?
[52:20] SPEAKER_02: And those things are happening.
[52:22] SPEAKER_02: They were happening even before I joined.
[52:23] SPEAKER_02: They will continue to happen.
[52:24] SPEAKER_02: That is the nature of the market.
[52:26] SPEAKER_02: But more importantly,
[52:27] SPEAKER_02: us is to enforce good governance with the experience that is in our control and to
[52:31] SPEAKER_02: work very closely with both the listed etiquette itself as well as the other regulators,
[52:36] SPEAKER_02: really that being the Capital Markets Authority.
[52:39] SPEAKER_00: Yeah,
[52:40] SPEAKER_00: I think the NSC also needs to wield a bit of a stick on some of these companies
[52:43] SPEAKER_00: that report very late now,
[52:45] SPEAKER_02: because some companies report at midnight on the 31st deadline.
[52:49] SPEAKER_02: I think it's not really good.
[52:51] SPEAKER_02: I think best practice is to do it a few days before.
[52:53] SPEAKER_00: And I think also that comes back to the NSC setting a good example for the rest.
[52:58] SPEAKER_00: I see Ruben in the audience.
[52:59] SPEAKER_02: He's very SD focused.
[53:00] SPEAKER_02: One question here is about how the corporate bond market doing.
[53:04] SPEAKER_02: And then the next question is about any green bonds.
[53:08] SPEAKER_02: Is there any interest in listing some green bonds in our markets?
[53:10] SPEAKER_02: Because I saw Tanzania did one the other day, one of their biggest banks.
[53:14] SPEAKER_02: Is it something that you see perhaps some interest in terms of corporate bond
[53:18] SPEAKER_02: market activity from the listed companies or not?
[53:20] SPEAKER_02: Incorrect.
[53:21] SPEAKER_02: Maybe let me first talk a little bit around our thinking around corporate bonds generally,
[53:26] SPEAKER_02: and then we can talk about the FAP category around green bonds and things like that.
[53:30] SPEAKER_02: You will know most markets around the world,
[53:33] SPEAKER_02: bar the US,
[53:35] SPEAKER_02: actually do not have very vibrant corporate bond issuers.
[53:38] SPEAKER_02: And the primary reason is that the mainstream market,
[53:41] SPEAKER_02: in this case,
[53:42] SPEAKER_02: the banking sector,
[53:43] SPEAKER_02: works very well to support corporate on the debt side.
[53:47] SPEAKER_02: So that most entities then end up coming to the market to raise equity, not debt.
[53:52] SPEAKER_02: That said,
[53:52] SPEAKER_02: the intention is to first look at our listed companies and see which ones of those
[53:59] SPEAKER_02: are more ready to come to market to issue corporate bonds.
[54:05] SPEAKER_02: identity themselves as they are.
[54:08] SPEAKER_02: The simple reason for that is that the governance processes are a lot more public market ready.
[54:14] SPEAKER_02: They know what their requirements typically are.
[54:16] SPEAKER_02: They tend to also have very good quality data.
[54:19] SPEAKER_02: In any event,
[54:20] SPEAKER_02: given that we are in a high interest environment,
[54:23] SPEAKER_02: and in my view,
[54:24] SPEAKER_02: I think that is going to persist for quite a while,
[54:26] SPEAKER_02: especially given the activities of the last few weeks in our country,
[54:30] SPEAKER_02: the government is going to,
[54:31] SPEAKER_02: in my view,
[54:32] SPEAKER_02: continue borrowing at fairly unlimited
[54:35] SPEAKER_02: levels,
[54:35] SPEAKER_02: the upper teens,
[54:37] SPEAKER_02: which means that bank in all likelihood will continue to lend to the private sector
[54:42] SPEAKER_02: in the mid-20s.
[54:43] SPEAKER_02: And that is a cure date now,
[54:45] SPEAKER_02: which means there is opportunity potentially to come to the public market and raise
[54:50] SPEAKER_02: funds to potentially more competitive terms,
[54:55] SPEAKER_02: including potentially even raising the
[54:58] SPEAKER_02: hard currency denominated funding through our market because we've had
[55:02] SPEAKER_02: conversations from foreign investors wishing to deploy hard currency in facilities.
[55:07] SPEAKER_02: Now,
[55:07] SPEAKER_02: the thing is,
[55:09] SPEAKER_02: if you look at that,
[55:10] SPEAKER_02: you have to ask yourself,
[55:11] SPEAKER_02: first of all,
[55:12] SPEAKER_02: is there an appetite for,
[55:13] SPEAKER_02: let me call them normal bonds,
[55:15] SPEAKER_02: before you start saying,
[55:16] SPEAKER_02: is there an appetite for different categories?
[55:18] SPEAKER_02: For example, in this case, green bonds.
[55:20] SPEAKER_02: What I think is this.
[55:22] SPEAKER_02: The green pole, let me call it the largest sustainability year.
[55:25] SPEAKER_02: There is more capital looking for opportunities than there are opportunities.
[55:29] SPEAKER_02: But the single biggest issue is origination and structuring.
[55:33] SPEAKER_02: In other words, how do you bring a project that meets the criteria
[55:38] SPEAKER_02: for whether it's ESG,
[55:40] SPEAKER_02: sustainability,
[55:41] SPEAKER_02: a sustainable finance type requirement,
[55:44] SPEAKER_02: green board as they call it.
[55:46] SPEAKER_02: So Bukai and Ruben,
[55:47] SPEAKER_02: we don't have a problem with wanting to provide a platform for this sort of
[55:54] SPEAKER_02: material bonds.
[55:55] SPEAKER_02: is actually what needs to be solved in the origination part of things.
[56:00] SPEAKER_02: And we've also seen that this needs to be issuers that are able to walk the journey
[56:04] SPEAKER_02: from origination to issuing to steering the course until you redeem or pay off the
[56:09] SPEAKER_02: bond because they are quite onerous requirement to first of all to use the funds
[56:15] SPEAKER_02: for the reason they were raised and to continually keep the variance reporting and
[56:21] SPEAKER_02: compliance elements in place.
[56:23] SPEAKER_02: So
[56:25] SPEAKER_02: Yes, have we had individuals come to us seeking opportunities in the spring?
[56:29] SPEAKER_02: Yes.
[56:29] SPEAKER_02: Have we started talking to the origination community to come to us with opportunities?
[56:34] SPEAKER_02: Yes.
[56:35] SPEAKER_02: Do I think that is going to move very quickly?
[56:37] SPEAKER_02: No.
[56:37] SPEAKER_02: Why?
[56:38] SPEAKER_02: The capacity to originate and structure is a gap.
[56:42] SPEAKER_02: Now,
[56:42] SPEAKER_02: if any of you here have that sort of skill set,
[56:45] SPEAKER_02: I think you need to start talking to platforms like ours and we can connect you to
[56:49] SPEAKER_02: really as players.
[56:50] SPEAKER_02: People like Africa Development Bank are interested in deploying capital in this theme.
[56:54] SPEAKER_02: IFC is looking to deploy capital in this theme.
[56:57] SPEAKER_02: A lot of DFI are looking to deploy capital in this theme.
[57:00] SPEAKER_02: So I think that's the fundamental.
[57:02] SPEAKER_02: I think we need to originate the instrument, the project.
[57:05] SPEAKER_02: Then you come to us.
[57:06] SPEAKER_02: We are happy to collaborate with you to steward the issue.
[57:09] SPEAKER_02: Ruben, any comment?
[57:10] SPEAKER_02: So yeah, thank you for that.
[57:12] SPEAKER_02: I think a lot of what you said is I 100% agree.
[57:15] SPEAKER_02: There are issues around the Kabul project.
[57:18] SPEAKER_02: In fact, I noticed a lot of my clients are not just in the African market.
[57:23] SPEAKER_02: There's a lot of appetite in terms of deployments.
[57:25] SPEAKER_02: green or sustainable capital without bankable projects as is.
[57:30] SPEAKER_02: Although with a caveat,
[57:31] SPEAKER_02: I think sometimes there are bankable projects only that they're,
[57:35] SPEAKER_02: you know,
[57:35] SPEAKER_02: if you think of it as a market,
[57:38] SPEAKER_02: you know,
[57:38] SPEAKER_02: every market has like such and such model.
[57:41] SPEAKER_02: I think sometimes the search cost for identifying which are the bankable projects is quite high.
[57:47] SPEAKER_02: And a lot of investors, they don't want to internalize that cost.
[57:51] SPEAKER_02: So I think that we also have a problem within our market.
[57:54] SPEAKER_02: But having said that,
[57:55] SPEAKER_02: Mokai,
[57:56] SPEAKER_02: allow me,
[57:56] SPEAKER_02: I have maybe three ideas I would like to mention to Frank,
[58:00] SPEAKER_02: which I think would probably help to expand the sustainable market space.
[58:04] SPEAKER_02: I think Frank, one is maybe a project preparation facility that is very much
[58:10] SPEAKER_02: focus on the green or sustainable market segments,
[58:13] SPEAKER_02: because I realize a lot of projects may not be bankable,
[58:16] SPEAKER_02: but with a little bit of project preparation facilities,
[58:19] SPEAKER_02: they can be good fit or investable in that sense,
[58:22] SPEAKER_02: not necessarily bankable.
[58:24] SPEAKER_02: And then the second one,
[58:25] SPEAKER_02: since we have a very huge crowding out effect in Kenya through investment in
[58:29] SPEAKER_02: government bonds,
[58:30] SPEAKER_02: maybe if we could,
[58:31] SPEAKER_02: maybe for more insurances by government,
[58:33] SPEAKER_02: if we could see more green,
[58:35] SPEAKER_02: some green insurances,
[58:36] SPEAKER_02: so that even as we see more
[58:38] SPEAKER_02: crowding out effect in the private sector.
[58:40] SPEAKER_02: Some of that crowding out capital actually goes to green investment.
[58:44] SPEAKER_02: So green for green issuances would really help this market.
[58:47] SPEAKER_02: And the last idea,
[58:49] SPEAKER_02: which is not the purview of the stock exchange or the exchanges exchange,
[58:53] SPEAKER_02: be just to support more local intermediaries,
[58:56] SPEAKER_02: because even currently a lot of the big climate
[58:59] SPEAKER_02: or green or sustainable projects in this market, the intermediaries are not local intermediaries.
[59:04] SPEAKER_02: So if you could also have a way to support local intermediaries from the
[59:07] SPEAKER_02: transaction advisors to the asset managers to the project partners,
[59:11] SPEAKER_02: I think that would help.
[59:13] SPEAKER_02: I think these three,
[59:14] SPEAKER_02: of course,
[59:14] SPEAKER_02: they are not like the main thing,
[59:16] SPEAKER_02: but I think they could really help to address the issue of investability or
[59:19] SPEAKER_02: bankability as you're addressing.
[59:21] SPEAKER_02: Thank you.
[59:22] SPEAKER_00: Thank you so much a lot.
[59:23] SPEAKER_00: Frank, maybe you'll take a note there.
[59:25] SPEAKER_02: Do you have a response?
[59:27] SPEAKER_02: And I think these are solid ideas, Ruben.
[59:31] SPEAKER_02: And again, we are open to have an extended conversation on this and see how we can take that forward.
[59:37] SPEAKER_02: I know some of the conversations we've had with some of the dear fans,
[59:41] SPEAKER_02: Ruben,
[59:41] SPEAKER_02: some of them have even mentioned that they'd be happy to provide co-assistance
[59:46] SPEAKER_02: funds to unlock some of these things.
[59:48] SPEAKER_02: So you're welcome to reach out to us and we're happy to see how we can take that forward.
[59:52] SPEAKER_02: We want the working market, and these are the ideas we need.
[59:55] SPEAKER_02: Good stuff.
[59:56] SPEAKER_02: A really nice East African community investor.
[59:58] SPEAKER_00: You can ask a question.
[1:00:00] SPEAKER_00: The East African investor.
[1:00:01] SPEAKER_01: I just wanted to say thank you so much, Mokaya, Mwango Capital, for making time to host this space.
[1:00:08] SPEAKER_01: I think for me, it's a little bit of an observation that I might have a question at the end.
[1:00:12] SPEAKER_01: As somebody that is usually active on the local market,
[1:00:16] SPEAKER_01: on the NSV,
[1:00:17] SPEAKER_01: and I'm also active on the New York Stock Exchange,
[1:00:20] SPEAKER_01: I think one of the main hurdles or one of the main roadblocks for a lot of investors,
[1:00:23] SPEAKER_01: even me,
[1:00:25] SPEAKER_01: investing in the NSC is how much it costs.
[1:00:27] SPEAKER_01: So like on average,
[1:00:28] SPEAKER_01: you know,
[1:00:29] SPEAKER_01: for you to trade on NSC,
[1:00:31] SPEAKER_01: you have to pay about two to maybe 2.4% commission to be able to trade.
[1:00:36] SPEAKER_01: And I mean, we all agree that for you to have a
[1:00:39] SPEAKER_01: a vibrant market, obviously we need more investors to be involved.
[1:00:43] SPEAKER_01: But I think sometimes the one thing that we are forgetting is at the brokerages,
[1:00:47] SPEAKER_01: how are we supporting them?
[1:00:49] SPEAKER_01: And one of the things like,
[1:00:50] SPEAKER_01: for example,
[1:00:51] SPEAKER_01: let's say I want to buy an apple on the New York Stock Exchange and maybe I'm using Vanguard,
[1:00:57] SPEAKER_01: I'm using Fidelity or one of those brokerages.
[1:01:00] SPEAKER_01: I can go ahead and place my order and they have two options to fill my order.
[1:01:05] SPEAKER_01: Either they can fill the order by themselves or they can send it to the exchange.
[1:01:09] SPEAKER_01: And what I mean by they can fill it by themselves is because they are allowed to be
[1:01:15] SPEAKER_01: able to buy some of this security.
[1:01:18] SPEAKER_01: So let's say if you are sending an order in and they are able to make money,
[1:01:22] SPEAKER_01: maybe their cost average was lower than what you are asking for.
[1:01:26] SPEAKER_01: They can go out and do that trade for you.
[1:01:28] SPEAKER_01: So my observation and question is, are you guys thinking around maybe allowing brokerages to be able to
[1:01:35] SPEAKER_01: do that,
[1:01:36] SPEAKER_01: because if they are making a little bit of money,
[1:01:38] SPEAKER_01: it means they have a little bit more extra money to be able to go out there,
[1:01:42] SPEAKER_01: maybe do the education,
[1:01:43] SPEAKER_01: maybe do advertising and bring in more investors to the NSA.
[1:01:47] SPEAKER_01: At the same time, if they are allowed to maybe make a certain percentage of that,
[1:01:52] SPEAKER_01: If they're able to maybe fulfill this order,
[1:01:55] SPEAKER_01: maybe they have a little bit better margin,
[1:01:57] SPEAKER_01: which means they can still share that margin with the NSC and the CDSC and the CMA.
[1:02:04] SPEAKER_01: Because I know at the end of the day,
[1:02:06] SPEAKER_01: all those organizations function and the way they function is through the
[1:02:09] SPEAKER_01: commission that we all pay I don't know how you guys around that question or that
[1:02:13] SPEAKER_01: observation if that's something that can be able to be done because when you look
[1:02:18] SPEAKER_01: at huge market London Stock Exchange New York Stock Exchange essentially that's
[1:02:23] SPEAKER_01: what they are doing to be able to make trading cheap and even free thank you thank
[1:02:28] SPEAKER_02: you this is first of all it's a very relevant point
[1:02:32] SPEAKER_02: And I should respond by saying that the first thing is that a lowering cost for trading,
[1:02:38] SPEAKER_02: cost of trading,
[1:02:40] SPEAKER_02: there are different components to it.
[1:02:42] SPEAKER_02: There is, of course, the fee stayed to the broker.
[1:02:46] SPEAKER_02: There is fee paid for the platform itself, the NSE.
[1:02:49] SPEAKER_02: And of course, it also paid out to the relator.
[1:02:54] SPEAKER_02: So there are different components to it.
[1:02:56] SPEAKER_02: You are absolutely right that if we don't look to solve this issue about cost,
[1:03:01] SPEAKER_02: the volumes that one would expect in our market will continue to be constrained.
[1:03:06] SPEAKER_02: What we are doing is,
[1:03:07] SPEAKER_02: number one,
[1:03:08] SPEAKER_02: we've been having conversations with the larger capital market ecosystem through
[1:03:13] SPEAKER_02: what we call the Capital Market Roundtable,
[1:03:15] SPEAKER_02: which has a technical working committee.
[1:03:18] SPEAKER_02: And one of the conversations that we are having there is a
[1:03:22] SPEAKER_02: opportunity in the cost structure to manage that?
[1:03:26] SPEAKER_02: And more importantly,
[1:03:28] SPEAKER_02: how do we actually lower costs while at the same time,
[1:03:30] SPEAKER_02: of course,
[1:03:31] SPEAKER_02: stimulating the market?
[1:03:32] SPEAKER_02: Some of the ideas that have been floated have been around, for example, rebates.
[1:03:37] SPEAKER_02: We are toying with the idea of,
[1:03:39] SPEAKER_02: for example,
[1:03:39] SPEAKER_02: if we do day trading and you close out your trade the same day,
[1:03:43] SPEAKER_02: then you don't need to pay some of the fees.
[1:03:45] SPEAKER_02: We also have noted that some of our fees may be driven by expensive infrastructure in terms of systems.
[1:03:52] SPEAKER_02: How do we rationalize that?
[1:03:54] SPEAKER_02: But then lowering our underlying costs, then it's easier to pass on that benefit to consumers.
[1:04:00] SPEAKER_02: In the interest of transparency,
[1:04:01] SPEAKER_02: I should say that it's quite unfair that large institutional players are able to
[1:04:06] SPEAKER_02: negotiate discounted fees,
[1:04:08] SPEAKER_02: particularly at the broker level,
[1:04:09] SPEAKER_02: because of the volumes,
[1:04:11] SPEAKER_02: the ticket sizes that they bring to market,
[1:04:13] SPEAKER_02: compared,
[1:04:13] SPEAKER_02: of course,
[1:04:14] SPEAKER_02: to smaller ticket orders that are primarily coming from retail investors.
[1:04:19] SPEAKER_02: So we are actually looking at it.
[1:04:21] SPEAKER_02: As I said, I think the key point to note is that NEC is working on a new strategy.
[1:04:27] SPEAKER_02: One of the key pillars of that is to grow the retail segment.
[1:04:32] SPEAKER_02: In order to grow the retail segment,
[1:04:33] SPEAKER_02: we are clear that the costs of participating in the market are an absolute
[1:04:38] SPEAKER_02: component that needs to be addressed.
[1:04:40] SPEAKER_02: We will also be looking at how to work with our other retail stakeholders to see
[1:04:45] SPEAKER_02: how to also use that as one of the ways to address some of these issues.
[1:04:50] SPEAKER_02: We have no doubt that
[1:04:51] SPEAKER_02: If we don't have a deeper market, there is not enough activity for everybody.
[1:04:56] SPEAKER_02: And of course,
[1:04:57] SPEAKER_02: then there is not enough commissions,
[1:04:59] SPEAKER_02: fees,
[1:04:59] SPEAKER_02: profits for all the other participants,
[1:05:02] SPEAKER_02: including yourselves as the investors.
[1:05:04] SPEAKER_02: So my commitment to you is that our ministry will look to address that.
[1:05:08] SPEAKER_02: But please also appreciate that it's not the NSE alone that can tackle this.
[1:05:13] SPEAKER_02: a concerted input across the capital market ecosystem.
[1:05:17] SPEAKER_02: And to that extent, you might have ideas in that we should consider.
[1:05:21] SPEAKER_02: We are open to that.
[1:05:22] SPEAKER_02: And you can reach us in a direct queue through Mokaya.
[1:05:24] SPEAKER_00: Yes.
[1:05:25] SPEAKER_00: Just below the pinned tweets that we put up, there are lots of questions.
[1:05:29] SPEAKER_00: I'll try and channel them through your team and then we'll get to answer as many of them as possible.
[1:05:34] SPEAKER_02: So I think it's very important.
[1:05:35] SPEAKER_02: The aim of this conversation was to bring you in front of the capital market
[1:05:39] SPEAKER_02: investors out here and to let them know who you are and to know what you're
[1:05:42] SPEAKER_02: offering in terms of the vision that you're building and what you want to do.
[1:05:45] SPEAKER_02: My quick feeling is that you're really interested in collaborative effort in terms
[1:05:49] SPEAKER_02: of pulling the capital market
[1:05:51] SPEAKER_02: from where it's been in the past couple of years.
[1:05:53] SPEAKER_02: So we welcome that and we welcome such engagements.
[1:05:56] SPEAKER_02: Because we close now,
[1:05:57] SPEAKER_02: I'd give you a moment maybe to lay out a bit of your vision around building NSE and
[1:06:02] SPEAKER_02: what you want to see in the next couple of years and how you would want the
[1:06:06] SPEAKER_02: investors who are listening to come on this journey towards building a better
[1:06:09] SPEAKER_02: capital markets in Kenya.
[1:06:11] SPEAKER_02: Thanks, Foucault.
[1:06:12] SPEAKER_02: Again,
[1:06:12] SPEAKER_02: I should say I appreciate the opportunity to engage with the capital market because
[1:06:17] SPEAKER_02: especially the investor community here
[1:06:20] SPEAKER_02: I should also say this is my first time in space and I'm learning after this as well.
[1:06:26] SPEAKER_02: Before I talk about my mission,
[1:06:28] SPEAKER_02: also,
[1:06:28] SPEAKER_02: you have our commitment to respond to the questions that have not been responded to.
[1:06:33] SPEAKER_02: So if you can compile them,
[1:06:34] SPEAKER_02: pass them through to our team,
[1:06:36] SPEAKER_02: then we will respond to those and you can share them back.
[1:06:39] SPEAKER_02: Now, in terms of visuals, let me start by saying actually, why are you even doing the MVP?
[1:06:43] SPEAKER_02: There are a number of reasons,
[1:06:45] SPEAKER_02: but the two that I would want to point out why I climbed to the bottom of the pyramid.
[1:06:50] SPEAKER_02: The first thing is NEC has a very professional board,
[1:06:54] SPEAKER_02: and that matters a lot,
[1:06:56] SPEAKER_02: especially to entities like this one that are really critical to the proper
[1:07:00] SPEAKER_02: functioning of the capital market as well as contributing to the development agenda
[1:07:04] SPEAKER_02: of the country.
[1:07:04] SPEAKER_02: So having a really professional board is key, and for me, that was a big result for joining the NEC.
[1:07:11] SPEAKER_02: And the second thing is that I get to work with my team to come up with a new
[1:07:16] SPEAKER_02: strategy for anything because the current one is coming to an end.
[1:07:20] SPEAKER_02: So that is also a key thing.
[1:07:23] SPEAKER_02: For some of you,
[1:07:24] SPEAKER_02: you will know that implementing somebody else's strategy is actually tough,
[1:07:28] SPEAKER_02: but getting to come up with your own strategy and implement it is key.
[1:07:32] SPEAKER_02: And the third reason was that I got the commitment from the board and the key shareholders
[1:07:39] SPEAKER_02: of the NAC, because as you see, the NAC itself has shareholders.
[1:07:42] SPEAKER_02: And as you see, you guys can actually buy shares in the NAC itself.
[1:07:46] SPEAKER_02: The key shareholders,
[1:07:48] SPEAKER_02: as well as the board in particular,
[1:07:50] SPEAKER_02: gave us the support to develop a bold and ambitious strategy for the NAC.
[1:07:56] SPEAKER_02: Now,
[1:07:56] SPEAKER_02: that's important to me because if we talk about doing this business as usual,
[1:08:00] SPEAKER_02: then,
[1:08:00] SPEAKER_02: of course,
[1:08:00] SPEAKER_02: we then have a subdued or moribund capital market.
[1:08:04] SPEAKER_02: So given those things,
[1:08:05] SPEAKER_02: and also,
[1:08:06] SPEAKER_02: of course,
[1:08:07] SPEAKER_02: we also have fantastic support from the government,
[1:08:11] SPEAKER_02: in particular the National Treasury,
[1:08:12] SPEAKER_02: the CPK on our fixed income side of things,
[1:08:15] SPEAKER_02: the Capital Markets Authority from a regulatory perspective,
[1:08:18] SPEAKER_02: among others.
[1:08:19] SPEAKER_02: All those are factors that contributed to me seeing this opportunity to actually come and actually work.
[1:08:26] SPEAKER_02: put in my fair share to build a nation.
[1:08:28] SPEAKER_02: Now, what's my vision?
[1:08:29] SPEAKER_02: My vision depends really, you can summarize this into three things.
[1:08:33] SPEAKER_02: Number one, I absolutely want to make NSE a market for the mall.
[1:08:39] SPEAKER_02: It should be democratized in the sense that access to the market
[1:08:44] SPEAKER_02: should be available to everyone and everyone wanting and willing to participate in this marketplace.
[1:08:50] SPEAKER_02: So you will see us pushing, as I said, to make that be.
[1:08:53] SPEAKER_02: There have been comments about Trinity being an elite institution available only to
[1:08:58] SPEAKER_02: those with money in KCTC.
[1:08:59] SPEAKER_02: Our intention is to address that.
[1:09:01] SPEAKER_02: That's one.
[1:09:02] SPEAKER_02: Number two,
[1:09:03] SPEAKER_02: We do want to have a balance between foreign investors and local investors.
[1:09:07] SPEAKER_02: And you will see us wanting to push to a good banner contract because I think in
[1:09:12] SPEAKER_02: the absence of that,
[1:09:13] SPEAKER_02: then we have a market that is vulnerable,
[1:09:16] SPEAKER_02: shall we say,
[1:09:17] SPEAKER_02: to what I would like to call to a mystic type capital that comes and goes on the
[1:09:21] SPEAKER_02: back of the headlines.
[1:09:23] SPEAKER_02: And then the third thing is we also want to do non-trading initiatives.
[1:09:28] SPEAKER_02: So we want to diversify a bit away from relying on trading revenues and start
[1:09:33] SPEAKER_02: building our other businesses.
[1:09:35] SPEAKER_02: We want to build our data business.
[1:09:37] SPEAKER_02: We want to build our capital market advisory type business.
[1:09:41] SPEAKER_02: We want to drive analytics offerings.
[1:09:43] SPEAKER_02: We want to bring other product innovation lab that will support other capital
[1:09:48] SPEAKER_02: market participants to bring other products to market.
[1:09:50] SPEAKER_02: We want to address the SME financing gap because it's huge.
[1:09:54] SPEAKER_02: And I think the banks can address all the need there.
[1:09:58] SPEAKER_02: And more importantly, we also want to get to a point where the NSE is also a marketplace for the region.
[1:10:03] SPEAKER_02: But it's not just for Kenya.
[1:10:05] SPEAKER_02: It also supports at least the larger African market.
[1:10:08] SPEAKER_02: And I think there's space for that.
[1:10:09] SPEAKER_02: If you do have ideas,
[1:10:11] SPEAKER_02: whether it's from an innovation perspective,
[1:10:13] SPEAKER_02: like tokenization,
[1:10:15] SPEAKER_02: please feel free to reach out to us.
[1:10:16] SPEAKER_02: We want to be a true partner to the capital market ecosystem.
[1:10:20] SPEAKER_02: And we also want to participate tangibly in the development of our economy from a capital market lens.
[1:10:25] SPEAKER_02: So the vision really,
[1:10:27] SPEAKER_02: in summary,
[1:10:27] SPEAKER_02: is you're not going to see business as usual at the NFT,
[1:10:31] SPEAKER_02: at least under my leadership.
[1:10:32] SPEAKER_02: And we've got the support of the board, the shareholders, government.
[1:10:36] SPEAKER_02: And hopefully now also the investor community and also,
[1:10:39] SPEAKER_02: of course,
[1:10:40] SPEAKER_02: our staff,
[1:10:40] SPEAKER_02: the NEC,
[1:10:41] SPEAKER_02: who have been very supportive as well and will also be very instrumental in coming
[1:10:45] SPEAKER_02: up with the new strategy and,
[1:10:46] SPEAKER_02: of course,
[1:10:47] SPEAKER_02: in its execution.
[1:10:49] SPEAKER_02: I think I end there and just make sure that I have made no promises about listing to Mokai.
[1:10:55] SPEAKER_02: In case you start asking me where I deleted it.
[1:10:57] SPEAKER_00: No, it's fine.
[1:10:58] SPEAKER_00: Thank you for coming and engaging with us.
[1:11:00] SPEAKER_00: We'll talk to your team and make this a bit more regular in terms of engagement so
[1:11:03] SPEAKER_02: that you can also be getting updates on what you're up to and what's new.
[1:11:07] SPEAKER_02: You can organize that because this was really good to have two months in, I think.
[1:11:11] SPEAKER_02: And yeah, I think you're on the right track.
[1:11:13] SPEAKER_02: We wish you all the best.
[1:11:14] SPEAKER_02: We want our capital market to succeed and that's why we're here.
[1:11:17] SPEAKER_02: And that's why we brought you here so that you can be able to discuss with investors.
[1:11:20] SPEAKER_02: Thank you.
[1:11:20] SPEAKER_02: Thank you.
[1:11:21] SPEAKER_02: Have a good evening, all of you.
[1:11:22] SPEAKER_02: And I thank you again for the opportunity and for your attention.
[1:11:25] SPEAKER_00: For the rest of us, thank you so much for joining us this evening on Mango Spaces.

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