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Nairobi Stock Exchange

With permission of the London Stock Exchange the Nairobi Stock Exchange started its operations in 1954 as an overseas stock exchange when Kenya was a British colony and the business of shares trading was restricted only to the resident European community though Africans and Asians were not permitted to deal in securities In1963, after independence, Africans and Asians were permitted to deal in securities, but it was complicated to convince native Kenyans of the significance of the exchange.

History and Origin of the Nairobi Stock Exchange
In the 1920s when Kenya was a British colony, an informal way of dealing in shares and stocks was commenced in Kenya. In 1951, an Estate Agent Francis Drummond established the earliest professional Stock broking firm, and impressed upon the then finance minister of Kenya Sir Ernest Vasey the idea of creating a stock exchange in East Africa.

Considering the proposal, which was given by the then finance minister of Kenya Sir Ernest Vasey and Francis Drummond, the London Stock Exchange officials approved to recognize the creation of the Nairobi Stock Exchange as an overseas stock exchange in July, 1953.
In 1954, the Nairobi Stock Exchange was comprised as a voluntary organization of stockbrokers enrolled under the Societies Act.
The business of shares trading was restricted only to the resident European community though Africans and Asians were not permitted to deal in securities.

In 1963, Kenya became independent and Africans and Asians were permitted to deal in securities. In the first three years of independence the economic development was stable, market confidence was regenerated and the exchange operated several highly oversubscribed public issues.

In 1972, development was discontinued and share prices were depressed, when the oil crisis brought in inflationary pressures in the economy.

A 35% capital gains tax was launched in 1975, imposing foster losses to the exchange and simultaneously the exchange lost its regional character following the nationalizations, exchange controls and other inter-territorial restrictions initiated in adjacent Tanzania and Uganda.

In 1980, The Kenyan Government understood the requirement of design and implement policy transformation to promote the sustainability of economic growth with an efficient and steady financial system.

In1984, A Central Bank of Kenya study, "Development of Money and Capital Markets in Kenya" was known as a blueprint for structural reforms in the financial markets which helped the creation of a regulatory body 'The Capital Markets Authority' (CMA) in 1989.

Notably, in 1994 the NSE 20-Share Index recorded an all-record high of 5030 points on Feb. 18, 1994. The NSE was rated by the International Finance Corporation (IFC) as the best performing market in the world with a return of 179% in dollar terms In December 1995, the entire Exchange Control Act was revoked. With the privatization of Kenya Airways in 1996, the largest share issue in the history of NSE, and the Kenya Airways Privatization team is rewarded the World Bank Award for Excellence for 1996.

In the 2000/2001 budget, the Government offered the extra incentives to capital markets investments. In July 2000, the Central Depository System (CDS) Act was passed by Parliament and sanctioned by the President in August 2000.

The Capital Markets Authority Act was amended and known as the Capital Markets Act. In August 2000, CFC Financial Services the first licensed dealer on the Nairobi Stock Exchange started its operations.

In February 2001, basic reformation of the capital market of Kenya took place and divided the market into four independent market segments: the Main Investments Market Segment (MIMS), the Alternative Investments Market Segment (AIMS), the Fixed Income Securities Market Segment (FISMS) and later Futures and Options Market Segment (FOMS).

In the2001/2002 budget, the Government offered the extra incentives to capital markets investments. On17th April 2002, the CMA declared the sanction of the new NSE trading and settlement rules with amendments. On 26th July 2002, with the introducing of a New Foreign Investor Regulations, there are three categories of investor on the capital markets; local, East African and foreign.

On 5th August 2002, the Nairobi Stock Exchange, the Capital Markets Authority of Kenya, the Association of Kenya Stockbrokers, the CMA Investor Compensation Fund, and 9 institutional investors through the Capital Markets Challenge Fund have signed a Shareholder Agreement for establishment of the Central Depository and Settlement Corporation (CDSC). On Monday, 11 September 2006 live trading on the automated trading systems of the Nairobi Stock Exchange was implemented.
Market Capitalization
In the2001/2002 budget, the Government offered the extra incentives to capital markets investments. On17th April 2002, the CMA declared the sanction of the new NSE trading and settlement rules with amendments. On 26th July 2002, with the introducing of a New Foreign Investor Regulations, there are three categories of investor on the capital markets; local, East African and foreign.

On 5th August 2002, the Nairobi Stock Exchange, the Capital Markets Authority of Kenya, the Association of Kenya Stockbrokers, the CMA Investor Compensation Fund, and 9 institutional investors through the Capital Markets Challenge Fund have signed a Shareholder Agreement for establishment of the Central Depository and Settlement Corporation (CDSC). On Monday, 11 September 2006 live trading on the automated trading systems of the Nairobi Stock Exchange was implemented.

Major Companies listed in Nairobi Stock Exchange

Kakuzi Limited
Sasini Tea and Coffee Limited
Unilever Tea Limited
Car and General Kenya Limited
Kenya Airways
TPS Serena
CMC Holdings
British American Tobacco Kenya
British Oxygen Company (K) Ltd Kenya Oil
Top Investors
Barclays Bank of Kenya
Kenya Commercial Bank
National Industrial Credit Bank
Pan Africa Insurance Holdings
Housing Finance
CFC Bank
Standard Chartered Bank
Diamond Trust Bank of Kenya
ICDC Investment Company
National Bank of Kenya

Location Details
Nairobi Stock Exchange
2nd Floor
Nation Centre
Kimathi Street
Nairobi
Kenya
Postal Address:PO Box 43633
Telephone: 254-2-230692
Fax: 254-2-224200
Email:info@nse.co.ke
Website:www.nse.co.ke

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