Nairobi- Uganda power distributor’s shares traded for the very first time on Wednesday at the Nairobi bourse, following the activation of the Regional Inter-Depository Transfer Mechanism (RITM).
Umeme’s shares were cross-listed at the Nairobi Securities Exchange (NSE) seven months ago but lack of an appropriate infrastructure to allow for the quick transfer of shares has hindered trading, despite the counter being one of the most traded at the Uganda Securities Exchange (USE).
The counter saw a trade of 1,000 shares at the NSE at Ksh13 ($0.15) compared to 125,059 shares traded at the USE at an average price of Ush360 ($0.14).
NSE said that the shares traded following the successful transfer of Umeme shares at the USE’s Securities Central Depository (SCD) to Kenya’s Central Depository and Settlement Corporation (CDSC) using the new system which went live early this week.
“This will benefit investors and issuers of cross listed securities such as Umeme. It gives great leverage to shareholders as they are able to decide on which exchange to trade and in which currency,” said Peter Mwangi, chief executive officer, NSE.
He said that the successful implementation of the regional inter-depository transfer mechanism would enhance the efficient movement of securities across the East African Community region.
Last week, members of the East African Securities Exchange Association (Easea), at a meeting in Zanzibar signed a memorandum of understanding for the establishment of the inter-depository transfer system.
Easea, which brings together the NSE, USE, Dar es Salaam Stock Exchange (DSE), Rwanda Stock Exchange (RSE), Kenya’s Central Depository and Settlements Corporation (CDSC) and Burundi’s yet to be established securities market, had said the system would go live on Monday.
The activation of the RITM cuts down the time it takes to move the assets by electronic settlement, to at most four days from more than two months. In the past, the lengthy clearance process hindered the trading of cross-listed shares in other markets other than where they are primarily listed.