M-Akiba raises Sh197 million against Sh250 million target

NSE Chief Executive, Geoffrey Odundo. [Image: File]

NAIROBI, KENYA: The Capital Markets Authority (CMA) has approved the listing of the M-Akiba Retail Infrastructure Bond on the Nairobi Securities Exchange (NSE).

This tranche which was on offer from Monday, February 25, 2019, to Sunday, March 10, 2018, raised a total of Sh197 million against a target of Sh250 million reporting a 79 per cent subscription rate. The bond attracted over 82,829 new registrations.

The bond which enjoys a coupon rate of 10 per cent payable every six months will be redeemed on September 7, 2020, and will have three interest payments dates: September 9, 2019, March 9, 2020, and September 7, 2020.

M-Akiba seeks to deepen and enhance financial inclusion through leveraging on increased mobile phone penetration to democratize access to formal financial systems for savings and investments.

More Kenyans are now able to participate in Government bonds by investing a minimum Sh3,000 which is considerably lower in comparison to the minimum Sh50,000.00 required to invest in other Treasury bills and bonds.

Since inception, the bond has attracted over 450,000 new investors onto the bond platform underscoring the bond’s potential to revolutionize access to capital market products.

Commenting on the M-Akiba 2 (Re-open 1), the NSE Chief Executive, Geoffrey Odundo noted, “The 79 per cent subscription rate is a clear indication of Kenyans investment appetite and an affirmation of the need for more innovative financial products in our market. The NSE will offer a world-class trading facility for the bond as it commences trading on the secondary market, enabling any investor who missed an opportunity to purchase the M-Akiba bond to do so and enjoy the myriad of benefits the bond offers.”

Reiterating his remarks, the Central Depository and Settlement Corporation (CDSC) CEO, Ms Rose Mambo, said, “The total collected during the two weeks was Sh197 million. CDSC now hosts a total of 459,586 M-Akiba bond CDS accounts. The March re-open has seen an additional 82,829 new accounts created in the CDS system. Since the first issue in March 2017, CDSC has paid out, on behalf of the Government, a total of Sh47,282,500 in interest, to M-Akiba investors. CDSC paid an additional Sh12,387,500 on Monday, March 11, 2019, bringing the total amount paid in interest to Sh59.67 million.

CDSC will continue to perform its role as the issuing and paying agent for M-Akiba bond. CDSC has put in place robust systems that ensure security of client information and seamless settlement of transactions.”

The trading of the bond on the secondary market will enable Kenyans to participate in the bond and enjoy a high return of 10 per cent interest that is tax exempt, proving to be very competitive against other investment instruments.