The Nairobi Securities Exchange (NSE) is set to vacate its head office in Nairobi’s Westlands for a new location and is considering selling the building known as the EXchange.
The move comes, nearly 12 years after the Nairobi bourse moved into the EXchange. The NSE was previously hosted in a rental space within the Nairobi city centre.
“We are going to rebrand and relocate in the course of the year to be in a location that is more suitable for an exchange like ours and that aligns with the rebrand of the NSE to its next phase of growth,” NSE chief executive officer Frank Mwiti said.
“We have commissioned a project to look at all the possible options including whether to sell the building, refurbish or rent it out. This process is still ongoing and would require several approvals including that of the board.”
The decision by the NSE to relocate to a new physical “suitable location’ could however draw queries since the bourse operates a digital platform accessible to investors through their remotely set brokerage firms.
The NSE began operations in the 1950s with no physical trading floor before taking up space at the IPS Building in Nairobi’s city centre.
The NSE then moved to the Nation Centre in July of 1994 where it set up a computerised delivery and settlement system. The move away from the central business district in June of 2013 saw the bourse turn from a tenant to a building owner and a lessor.
The NSE did not disclose the cost of acquiring the EXchange but initially valued the building at Sh140.5 million as of January 1, 2013.
The building had a fair value of Sh101.5 million as of the end of December 2023, after an assessment carried out by Kenstate Valuers Limited and Tyson Limited.
The bourse meanwhile pocketed Sh6.5 million as lease rental income in 2023 while projecting a further Sh27.4 million in rent collections within five years.
The NSE went public during its time at the EXchange where it floated 194.6 million shares of Sh9.5 each to become, at the time, the second African exchange after the Johannesburg Securities Exchange (JSE) to be listed.
The Nairobi bourse primarily sources its revenues from transaction levies on equities and bonds trading in addition to data vending, unquoted securities platform fees, and broker back-office subscriptions.
Total income for the NSE closed 2023 at Sh662.3 million from Sh642.7 million previously while its net profit in the same period was Sh18.4 million from Sh13.7 million a year earlier.
The bourse has in recent years operated in a challenging environment including unfavourable interest rates, elevated inflation, and exchange rate pressures which have resulted in exits by foreign investors who form a critical constituent of equities trading.
The challenges have exerted significant pressure on the performance of the NSE including the gradual erosion of market capitalisation over the past decade which has reduced the attractiveness of stocks to both institutional and retail investors.
The NSE has also struggled to attract new listings as potential issuers stay put for a variety of reasons including the observed market downturn.
