NSE-Web-Prospectus-2014

Chief Executive’s Statementwhich individuals and companies can cushion themselvesagainst interest rate fluctuations, exchange rate volatility,and commodity price changes while boosting liquidity in theunderlying assets. We believe that a more liquid market willattract more capital, which can finance Kenya’s Vision 2030ambitions and support East African businesses.Going forward, NSE will need to balance the new ”for-profit”and “revenue diversification” motives of its shareholdersand the continuing demands of all other stakeholders. As theregional and domestic economies continue to expand, theNSE as the leading regional stock exchange can only grow.The financial performance of the bourse will be driven byincreases in the GDP growth rate, the market capitalizationto GDP ratio, as well as equity and bond turnover ratios.I look forward to welcoming you as a shareholder of the NSE.Dear Investor,On behalf of the management and staff of the NSE, I wouldlike to congratulate all our stakeholders on this Offer andSelf-Listing. I also extend a warm invitation to all investors totake advantage of this opportunity to become part ownersof the Exchange.Mr. Peter MwangiChief ExecutiveOver the years the company has grown and now has totalassets of Kshs 1.14 billion (USD 13.16 million). This includesthe value of its five-storey building at 55 Westlands Road,Nairobi the location of the new NSE headquarters, “TheEXchange”.The business generated a profit before taxation of Kshs379 million (USD 4.37 million) for the full year ending 31December 2013. The NSE declared a dividend of Kshs 49million for the full year ending 31 December 2013 whichwas double that for the previous year.We have high expectations for the year 2014 and beyond.We have already embarked on several initiatives that willsignificantly grow and develop the market over the next 12to 18 months. These are categorized as Equity Capital MarketInitiatives, Debt Capital Market Initiatives, New MarketInitiatives and Miscellaneous Initiatives and are detailed inSection 9 of this Prospectus under Future Outlook.12In particular, the NSE has invested in a state-of-the-art system,in partnership with technology and market specialists,to establish a world class derivatives exchange. This willfacilitate the trading of futures and options which are amongthe most cost-effective and convenient means through