This archive report was first published on 16 July 2019.
The Nairobi Securities Exchange (NSE) is set to launch its fourth M-Akiba bond issue on Monday, July 22, 2019, with the goal of raising Ksh.250 million.
This move comes after the National Treasury reopened the sale of the bond at the end of February 2019, following a near-two year hiatus.
Like its predecessors, the new bond will have a two-week primary trading window before opening up to the secondary NSE market.
Despite previous issues failing to meet their targets, the NSE remains optimistic about the uptake of the mobile traded bond, citing the diffusion theory and the potential for Kenyans to create momentum.
“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 said.
The first M-Akiba issue in 2017 faltered, raising only Ksh.247 million against a target of Ksh.1 billion. However, the number of new CDSC accounts has continued to grow, with new accounts in the last issue hitting 30,232, bringing the total number of M-Akiba trading accounts to a record 505,000.
M-Akiba has since launch paid out a total of Ksh.67 million in investor returns, with past issues coming up for more investor pay-outs beginning in September 2019.
The government remains committed to the democratization of the country’s capital markets, providing for the greater participation of citizens in the trade of fixed government securities.
“M-Akiba provides a saving mechanism for Kenyans who can save up to a dollar a day and invest in government securities at the end of the month,” President Uhuru Kenyatta said at the Afro-Asia Fintech Festival on July 15, 2019.
The new M-Akiba offering will be launched in Mombasa County, as part of the move towards the deepening and diversification of Kenya’s capital markets.
