The Nairobi Securities Exchange (NSE) is a leading African Exchange, based in Kenya – one of the fastest-growing economies in Sub-Saharan Africa. Founded in 1954, NSE has a long heritage in listing equity and debt securities. NSE plays a vital role in the growth of Kenya’s economy by encouraging savings and investment, as well as helping local and international companies access cost-effective capital. NSE operates under the jurisdiction of the Capital Markets Authority of Kenya.
Functions of the Nairobi Securities Exchange (NSE) are listed below.
- Allows the owners of capital to ‘divorce’ from managing their capital; a very important step because owners of capital may not necessarily have the expertise to manage capital investment efficiently
- Check against flight of capital which takes place because of local inflation and currency depreciation
- Enables futuristic funding, when venture capital is unavailable
- Encourages of higher standards of accounting, resource management and public disclosure which in turn affords greater efficiency in the process of capital growth
- Encourages public floatation of private companies which in turn allows greater growth and increase of the supply of assets available for long term investment
- Facilitates equity financing as opposed to debt financing. Debt financing has been the undoing of many entities especially during recession
- Growth of related financial services sector e.g. insurance, pension and provident fund schemes which nature the spirit of savings
- Improves access to finance for new and small companies
- Mobilization of savings for investment in productive enterprises as an alternative to putting savings in bank deposits, purchase of real estate and outright consumption