NSE raises its M-Akiba target to Ksh.500M against declining subscription


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In Summary

  • The raise of bar on targets is against subsequent misses in previous re-opening sessions which were set against a lower ceiling of Ksh.250 million.
  • NSE has however held on to the capital markets instrument in hope of winds of change to uptake while taking refuge in the bond’s growing number of registered accounts which now sit at 513,000 from 505,000 in June.
  • The present offering which has 12 months to maturity makes for the highest grossing offer to the public with the recent trading 364-day treasury bill pegged at a lesser yielding rate of 9.4 percent.

The Nairobi Securities Exchange (NSE) has raised the price of its mobile-traded infrastructure bond- M-Akiba to Ksh.500 million on the bond’s third re-opening.

The raise of bar is against subsequent misses in previous re-opening sessions which were set against a lower ceiling of Ksh.250 million.

M-Akiba’s first re-opening in March attracted a disappointing Ksh.197 million in investor funds while the most recent offer in June saw its subscription rate slide further down to 75 percent or an equivalent Ksh.187.5 million.

NSE’s missed targets have informed of the government’s on-going struggle to reach traction for the ‘attractive’ Mwananchi  targeted investment tool in spite of an attractive 10-percent tax free offering.

The NSE has however held on to the capital markets instrument hoping for uptake while taking refuge in the bond’s growing number of registered (CDSC) accounts which now sit at 513,000 from 505,000 in June 2019.

“This remains the only available government security on a fixed-10 percent tax free return. When something is still new, we still have to greatly rely on the diffusion theory for uptake where Kenyans will from within themselves create the momentum,” NSE Head of Enterprise Innovation David Waggema told Citizen Digital in an earlier interview.

The bond’s poor performance has been primarily blamed on low-investor education with many of the critiques still largely viewing the NSE as elitist in its approach to the marketing of capital markets tools.

Mr. Waggema however shrugged off the critique attached on NSE’s part while assuring of the bourse’s close touch with its original target of Ksh.1 billion.

The new offering on M-Akiba will be open for first-move by investors between Monday August 19, 2019 and midnight on September 6 before being secondary listed on Tuesday September 10, 2019.

According to the NSE, the structure of uptake for the bond has remained the same with the majority 68 percent of Kenyans taking up bonds worth between the minimum Ksh.3000 and Ksh.20,000 with only an eight percent share of the public investing in values above Ksh.100,000.

The present offering which has 12 months to maturity makes for the highest grossing offer to the public with the recent trading 364-day treasury bill pegged at a lesser yielding rate of 9.4 percent.

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Story By Kepha Muiruri
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