StanChart issued rights start trading at NSE

Tuesday November 27 2012

StanChart banking hall. Photo/LIZ MUTHONI

Standard Chartered rights issue shares began trading at the Nairobi securities Exchange (NSE) on Tuesday, effectively raising the bank’s shares available at the bourse.

The bank has issued some 22 million shares, 70 per cent of which had been taken up by anchor shareholder Standard Chartered Bank UK.

“The success of the rights issue now enable us to pursue the attractive opportunities we see for growth like the increasing demand for loans and advances while also raising our capital ratios to make us stronger. We believe this approach will create clear long-term value for our shareholders, and underpin the financial strength of the Bank,” said Anne Mutahi, the bank’s acting chairman.

The rights issue was over-scribed by 158 per cent, attracting Ksh8.3 billion compared to the target amount of Ksh3.2 billion. Speaking at the bell ringing ceremony, the NSE vice chairman bob Karina urged banks to issue other types of securities.

“We would like to urge our banks to take the next step and issue asset backed securities based on the Capital Markets (Asset Backed Securities) Regulations. Doing so would enable banks to safely shore up their balance sheets and lend to the real economy – businesses big and small that are the backbone of our economy. Issuing Asset Backed Securities would also create a new investment opportunities for investors in our market,” said Mr Karina.

Standard Chartered's second cash call in three years makes the bank the fifth lender this year to tap Kenya's capital markets for new funding. CFC Stanbic, Family Bank, DTB and NIC are among the lenders who have opted for rights issues to raise funds.


High costs of borrowing have tipped the scales in favour of rights issues as firms looking for expansion capital shun expensive bank loans and corporate bonds.

In October 2010, StanChart raised Ksh2.49 ($29.6 million)billion by selling 15.1 million shares in a rights issue that was oversubscribed by almost two times.