Kenya's bourse woos Chinese investors with promise of high returns

NSE chief executive officer Geoffrey Odundo told China's state Xinhua news agency that the bourse is preparing to hold a series of "roadshows" in China "so that we create awareness of the NSE".

Odundo said the move is in response to increasing interest by Chinese investors in infrastructure projects in Kenya.

"By listing on the NSE, the Chinese can access long-term capital at cheaper rates," Odundo said. He said China had a "high savings ratio" compared to Kenya, so "there is a huge pool of Chinese funds that is looking for the high returns that the NSE currently offers."

Talks have already begun between the NSE and potential Chinese investors, Odundo said.

According to Xinhua, the NSE has already signed a memorandum of understanding with the Shanghai Securities Exchange under which "Kenya will be assisted to develop products that appeal to Chinese capital markets investors".

NSE staff will also be visiting the Shanghai bourse "in order to understand how the Chinese exchange has expanded rapidly in the past decade", Xinhua said.

In 2015, China and Kenya agreed to extend their 'industrialisation partnership' with a new focus on technology transfer and more Chinese involvement in infrastructure development.

The announcement came after the China Communications Construction Company signed a deal with Kenya to build the first three berths of Kenya's Lamu Port to handle general, bulk and container cargo under the Lamu Port-South Sudan-Ethiopia transport corridor project.

Kenya's national Treasury said last year that China had become Kenya's "largest bilateral development partner" with the signing of a deal for Chinese financial backing to improve the East African nation's transport infrastructure. The announcement followed the signing of an agreement with the Export-Import (Exim) Bank of China to finance the first phase of the upgraded Kibwezi-Mutomo-Kitui highway in eastern Kenya.

The highway project saw confirmed Chinese support for Kenya's development agenda increase to an accumulated 539 billion Kenyan shillings (KES) ($5.2 billion), the National Treasury said.

A World Bank report published last year (65-page / 2.28 MB PDF) said that as a result of the economic slowdown in China, "marketing for construction services should increase globally, and even more Chinese companies may come to Kenya to undertake major infrastructure and construction projects".