By James Anyanzwa
Nairobi Securities Exchange ( NSE) is in the process of securing a Sh250 million debt from a local financial institution to finance part of a major acquisition in the real estate sector.
The move is part of NSE’s five-year (2010-2014) strategic plan that seeks to bolster the exchange’s revenue reserves, diversify income streams, boost liquidity in listed securities, attract new listings, and transform the 58-year-old bourse into a major force within the Sub-Saharan Africa.
NSE is eyeing an estimated Sh360 million worth of a prime commercial property in Nairobi’s Westlands area, as the bourse warms up to tap into rental income to prop up its revenue base.
The acquisition of the six-storied Tosica Centre — located at 55 Westlands Road — constitutes a core component of NSE’s medium-term strategic goals.
The acquisition is being funded through a mixture of debt and internally generated resources.
“The anticipated appreciation of this real estate asset on the books of the NSE will also enhance shareholder value,” said Eddy Njoroge, NSE’s chairman, adding that the exchange is keen to diversify its revenues.
NSE’s revenues are highly vulnerable to fluctuations in transaction levies and listing fees, which hinge on the volatility of the stock market.
According to NSE ‘s annual report (2011), the bourse’s net profit grew 8.1 per cent to Sh85.6 million from Sh79.2 million in the previous year (2010).
Total income advanced 6.2 per cent to Sh338.9 million from Sh319.1 million buoyed by alternative revenue sources such as data vending and sales of publications.
Vending fees
According to the report interest income increased 61.6 percent to Sh20.5 million, data vending fees grew 25.2 per cent to Sh9.4 million from Sh7.5 million, while revenues from sales of publications grew by 208 per cent to Sh754,000 from Sh245,000 in a similar period.
