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The East African : May 3rd 2015
MONEY AND EQUITY MARKETS MAY 2-8,2015 MOST ESTABLISHED SOCIETIES IN AFRICA Kenya to set rules for Sacco listing on the NSE shares and registered under the Companies Act (Cap 486 of the Laws of Kenya). The issuer should also be on the Main Investment Market Segment (Mims) with a minimum authorised issued and fully paid up ordinary share capital of $537,634.4. On the Alternative Investment Market Segment (Aims), the issuer should have a minimum authorised issued and fully paid up ordinary share capital of $215,053.76 while companies seeking to list on the Growth Enterprise Market Segment (Gems) need to have a minimum authorised and fully paid up ordinary share capital of $107,526.88 . The net assets for companies seeking to list on the Mims immediately before the public offering or listing of shares should not be less than $1.07 million while on the Aims and Gems the net assets should not be less than $215,053.76 and $1,075.26 respectively. The issuers are also Saccos a≥e ≥apidly g≥owing in influence, with some opting to ente≥ into the banking space By JAMES ANYANZWA The EastAfrican K enya’s capital markets regulators are developing guidelines for how savings and credit co-operative Societies (Saccos) will be listed on the Nairobi Securities Exchange, a development that could see giant societies transform into companies limited by shares. The development which Under the current listing regulations, you must be a company limited by shares but we will look at ways on how to accommodate that structure.” NSE chief executive, Geoffrey Odundo has already received the green light from the Capital Markets Authority (CMA) and the NSE would see Kenyan Saccos sell shares to the public and open up their operations. Under the proposed arrangements, both members and non-members of Saccos, will be able to buy shares and earn dividends on their shareholding. The members would also be entitled to additional bonuses by virtue of their savings. The listing is expected to bolster corporate governance in Saccos which control millions of dollars’ worth of members’ savings. Kenyan Saccos are rapidly growing in influence, with some opting to enter into the banking space by acquiring small and struggling lenders. “I think Saccos are growing and diversifying their ownership. We are in support of listing. We are going to work with the Commissioner of Co-operatives and the Sacco Societies Regulatory Authority (Sasra) to agree on the modalities and legal requirements of the proposed listing,” CMA acting chief executive Paul Muthaura said. Kenya has the most established co-operative sector in Africa, comprising over 15,000 co-operative societies in all the sectors of the economy with over 10 million members. Out of these co-operative societies, 7,400 are Saccos that have mobilised over $4.3 billion in domestic savings. “The issue of Saccos wanting to list on the exchange NSE REQUIREMENTS An issuer must be a public company limited by shares and registered under the Companies Act. The issuer should also be on the Mims and must have a minimum authorised issued and fully paid up ordinary share capital of $537,634.4. On the Aims, the issuer should have a minimum authorised issued and fully paid up ordinary share capital of $215,053.76. Companies seeking to list on the Gems need to have a minimum fully paid up ordinary share capital of $107,526.88 is a positive move for the NSE,” said Geoffrey Odundo, NSE chief executive. “We shall definitely be working on modalities to accommodate the Sacco structure within the exchange. “Under the current listing regulations, you must be a company limited by shares but we will look at ways on how to accommodate that structure.” Mr Odundo said a study would be commissioned to determine international best practices of listing Saccos. The Kenyan government has declared that Saccos should be allowed to trade shares on the bourse and Commissioner of Cooperatives Patrick Musyimi said plans are in the pipeline to come up with regulations. According to the NSE listing requirements, an issuer to be listed on the bourse must be a public company limited by expected to have competent directors without a criminal record, with adequate working capital and clear future dividend policy. Saccos are expected to play a central role of mobilising both domestic and international financial resources to fund the Kenyan governments ambitious development projects under the Vision 2030 long term development plan. $4.3b 45 FUTURE LOOKS GOOD Uganda bou≥se ≥eco≥ds 76pc p≥ofit By BERNARD BUSUULWA The EastAfrican The Uganda Securities Exchange recorded a 76 per cent jump in profit after tax during 2014, exceeding the Ush1 billion ($329,192) mark for the first time in its 17-year history. The achievement has raised expectations of bigger infrastructural investments while boosting revenue forecasts among stockbrokers. Latest performance data re- leased by the bourse shows profit after tax increased from Ush964 million ($317,341) in 2013 to Ush1.7 billion ($559,627) in 2014, highlighting intense trading activity driven by large foreign investors seeking to diversify their portfolios across promising African stockmarkets. Total operating costs rose by 48 per cent from Ush189 million ($62,217) in 2013 to Ush362 million ($119,168) last year on the back of one-off costs incurred on relocation of the USE from downtown Kampala to the UAP Business Park. The USE posted a net profit after tax of Ush460 million ($151,428) in 2012, ending two years of loss making. The bourse’s gross income The amount of money that 7,400 saccos have mobilised On average Saccos have been contributing 48.5 per cent of Kenya’s gross national savings.Official government data shows that membership served by the Saccos, increased to 3.3 million in December 2013 from 2.97 million in 2012. In Kenya there are 215 Deposit Taking Saccos, which account for 78 per cent and 77 per cent of the total assets and deposits respectively of the entire Sacco sub-sector. During 2013, the total assets of the licensed deposit taking Saccos increased 16.5 per cent ($408.6 million) to $2.6 billion from the 2012 figures. This growth in assets was funded mainly by member’s deposits, which grew 19.3 per cent to $1.85 billion from $1.57 billion in 2012. increased by 13.5 per cent from Ush3.7 billion ($1,218.010) in 2013 to Ush4.2 billion ($1,382,610) in 2014, reflecting considerable growth in trading volumes and turnover. Profit before tax rose by 38.9 per cent from Ush1.8 billion ($592,546) in 2013 to Ush2.5 billion ($822,980) recorded in 2014. Transactions done on the trad- ing floor are charged a commission of 2.1 per cent each, with 1.7 per cent allocated to the stockbroker while the bourse and the Capital Markets Authority earn 0.14 per cent respectively. Total market turnover grossed Ush173,385,859,811 ($57,077,300) at the end of 2014 while overall trading volumes stood at 976,661,529 shares during the same period, USE figures indicated. Trading activity at the bourse was spurred by Actis’s sale of an additional 45.7 per cent stake in Umeme Ltd, a transaction that raised $98 million in June last year compared with the $69 million generated from the power distributor’s initial public offering, which was completed in November 2012.
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