NSE Chief Executive Peter Mwangi at a past event. File
By VICTOR JUMA
In Summary
NSE will be valued at nearly Sh2 billion on the first day of trading.
The NSE chief executive Peter Mwangi earned an
average of Sh1.1 million per month last year representing a 34 per cent
jump in his pay over the past five years, regulatory filings related to
the bourse’s ongoing IPO have showed.
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Mr Mwangi, who took over as CEO of the 60-year old
securities exchange in November 2008, received a total pay-out of Sh13.5
million last year compared to Sh10.1 million earned in his first
full-year at the helm.
The Nairobi Securities Exchange has recorded a
steady growth during Mr Mwangi’s tenure, recovering from a loss of
Sh35.8 million recorded in 2009 to last year’s after-tax profit of
Sh262.3 million. The NSE’s total assets have climbed 279.3 per cent to
Sh1.1 billion from Sh303 million in 2009.
The financial disclosures are made to help
investors assess the value of the exchange whose shares are on sale to
the public at Sh9.50 apiece. Going by the intended sale of 194 million
shares, the NSE will be valued at nearly Sh2 billion on the first day of
trading upon conclusion of the ongoing initial public offering (IPO).
Executive compensation has become a material
corporate governance disclosure requirement, helping investors to assess
the relative productivity of a workforce. The NSE is seeking to raise
up to Sh627 million through the IPO and self-list its shares on
September 9.
Mr Mwangi, 44, has extensive experience in the financial services industry. He joined the NSE from investment firm Centum
where he had been the managing director for four years. He holds a
Bachelor of Science Degree in Electrical Engineering from the University
of Nairobi besides being a chartered financial analyst.
His tenure coincided with a recovery in the
securities market which had seen the benchmark NSE 20-Share Index nearly
halve in 2008, weighed down by the global financial crisis and Kenya’s
internal political crisis. The index shrank 9.5 per cent in 2009 before
rebounding to gain 36 per cent in 2010. The index then plunged 30 per
cent in 2011 and recovered to record a 29 per cent growth in 2012.
It extended the rally to gain 19 per cent last
year, helped by strong corporate earnings and increased foreign investor
inflows.
Mr Mwangi’s term has been marked by introduction of
new products and increased efficiency at the bourse. The new products
introduced since 2009 include the FTSE NSE Kenya 15 and FTSE NSE Kenya
25 indices that are meant to further guide international investors
seeking to participate in the local market.
The bourse also started packaging and selling
market data to investors, opening a new revenue stream. The NSE has also
helped cut transactions settlement to three days from the previous four
days, excluding the day on which a security is traded.
Other significant developments include the
automation of trading starting 2011, with plans underway to enable
trading of securities through the internet.
Mr Mwangi’s term has also seen ground-breaking
deals at the market, including the reverse takeover of publicly traded
investment firm City Trust by I&M Bank which was privately held
before the transaction that was concluded in June last year.
vjuma@ke.nationmedia.com
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