This archive report was first published on 19 August 2019.
The Nairobi Securities Exchange (NSE) has increased the target for its mobile-traded infrastructure bond, M-Akiba, to Ksh.500 million, marking a significant rise from the previous target of Ksh.250 million.
According to the NSE, the new target is a result of the government's ongoing efforts to promote the 'attractive' Mwananchi targeted investment tool, which offers a 10-percent tax-free return.
However, the NSE's efforts have been met with disappointing results, with the bond's first re-opening in March attracting only Ksh.197 million in investor funds, and the most recent offer in June seeing its subscription rate slide further down to 75 percent, equivalent to Ksh.187.5 million.
Despite the challenges, the NSE remains optimistic about the bond's potential, citing the growing number of registered CDSC accounts, which now stand at 513,000, up from 505,000 in June 2019.
"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 told Citizen Digital in an earlier interview.
The bond's poor performance has been primarily blamed on low-investor education, with many critics viewing the NSE as elitist in its approach to marketing capital markets tools.
The new offering on M-Akiba will be open for first-move by investors between Monday, August 19, 2019, and midnight on September 6, before being secondary listed on Tuesday, September 10, 2019.
