(Xinhua) -- New products are set to be introduced
at the Nairobi Securities Exchange (NSE) to boost the market,
whose equity trading has dropped considerably following a
bear-run that has hit revenue.
Exchange Traded Funds (ETF) and Global
Depository Receipts are among the products the bourse is
targeting to start this year, according to chief executive
“In 2017, the exchange shall continue
to aggressively pursue new listing opportunities. Whilst
continuing to encourage trade in equities and fixed income
instruments, the bourse has its sights set on
diversification of revenue through new product offerings
such as Exchange Traded Funds, Derivatives Contracts and
Global Depository Receipts (GDR),” said Odundo Tuesday.
ETF are a type of investment fund
traded at the stock exchange while derivatives contract is an
agreement whose value is derived from the values of interest
rates and foreign exchange rates, among others.
On the other hand, GDR is a
certificate issued by a bank, which purchases shares of foreign
companies and deposits it on the account.
The Growth Enterprise Market (GEM) and
Alternative Investment Market segments are among those that
recorded new listing last year.
Launched in 2013, GEMs segment has
offered small firms a chance to grow through flexible listing
requirements such as reduced number of shares issued (100,000)
and a minimum paid up capital of 99,000 U.S. dollars.
Odundo noted that the capital markets
sector remained resilient last year despite a challenging
operating environment both locally and internationally.
“Though equities turnover decreased as
at end of December 2016, bond turnover increased
significantly and this segment continues to register good
performance,” he said.
The NSE, which is also listed at the
bourse, issued a profit warning in November last year for its
full-year earnings, citing reduced equity trading volumes.
Analysts note the NSE continues to
witness volatility on large cap stocks led by Safaricom, East
Africa Breweries Ltd, Cooperative Bank and Kengen.
They expect more capital flight from
the market this year which may leave valuations further lower
than they closed 2016.