Equity Bank Share Price Opens With 137 per cent Up

By Godfrey Tung'wet Posted 08 August 2006 @ 03:50 pm EET     Print     Reprint     E-Mail     Comments

NAIROBI (IBTimes.com) - Equity Bank shares, which were officially listed at the Nairobi Stock Exchange (NSE) on Monday, climbed to an average price of Sh166 from the recommended price of Sh70.

The sharp price increase, reflecting a 137 per cent above the recommended price, was recorded on the first day of trade.

Equity Bank opened trade at Sh100 before settling at a high Sh158 reflecting investors growing appetite for new securities.

Equity Bank’s 2,500 shareholders offered to list 90.5 million shares to the bourse in a listing that was done by way of private placement with additional funds being raised from the market.

The bank’s chairman, Mr Peter Munga, rang the bell at exactly 10.04 am to mark the listing of the bank’s shares.

The bank chief executive officer, Mr James Mwangi, said he was optimistic about the prospect of shareholders realising the real worth of their shares.

"There is a shortage of shares, products and instruments in the market because people are running away from fixed assets into liquid assets," said NSE Chairman Mr Jimnah Mbaru.

Equity has over 750,000 depositors, the majority medium- and low-income earners in rural areas that have been largely ignored by most commercial banks.

The listing of the new stocks has propelled the NSE into the fourth most capitalised bourse in Africa after Johannesburg, Nigeria, and Cairo (Egypt) stock exchanges.

The listing will also see some 2,700 investors open new CDS accounts. Mr Edward Ntalami, the chief executive of the Capital Markets Authority said Equity’s listing should provide the route for other companies to enter the bourse either through private placement or Initial Public Offer.

He said the bank has been subjected to "exactly the same stringent listing criteria as if it was raising capital from the public."

"The fact that there was no public borrowing involved did not in any way confer eligibility concessions to the bank," said Ntalami.

Ntalami said that the Government has granted no less than 20 fiscal and tax incentives to issuers and investors through the capital markets and announced that CMA expects four new listing before the end of the year.

"There is no doubt that the market is thirsty for viable investment opportunities."

Ntalami said the listing of Equity Bank, KenGen and the four new listings by the close of the year is an indicator that the country’s capital markets is standing at the threshold of a new and more exciting era.