Why regional peers are upbeat about new Somali securities market?

Zawya

23-06-2025

East African capital markets are optimistic of accelerated integration of regional stockmarkets and an expanded pool of investors for companies seeking to raise capital in the region, especially after the launch of the National Securities Exchange of Somalia (NSES).
Its peers have termed the launch a major milestone, with Celestin Rwabukumba, the chief executive of the Rwanda Stock Exchange (RSE) and chairperson of the East African Securities Exchanges Association (Easea), saying it would take Somalia towards greater wealth creation and financial inclusion.'For the East African Community, it is a step in the right direction adding a new national exchange, as it will grow the region bigger and bring full integration and the greater continent closer to reality. It will add on more investors and companies in the region,' Mr Rwabukumba said.
Somalia officially launched its NSES on Thursday, marking a significant step towards the country's long-term economic growth and its integration into regional and global financial markets.
The exchange has been established by a coalition of local investors and financial experts with the aim of creating a transparent, robust financial marketplace and trading is projected to begin in early next year.'There has been a small exchange privately owned and operated but, today, what they are launching is the National Securities Exchange of Somalia,' Mr Rwabukumba said.
In January this year, Ethiopia launched the Ethiopian Securities Exchange (ESX), marking an end to Addis Ababa's 50-year wait for a stockmarket.
Ethiopia, Africa's second-most populous nation after Nigeria, had a stockmarket for 14 years until 1974, when Emperor Haile Selassie was overthrown by the nation's military and share trading was abolished.
The new Somali exchange is expected to provide local businesses with access to much-needed capital, attract foreign direct investment (FDI) and serve as a key platform to connect domestic businesses with local and diaspora investors, supporting economic growth.
Former chief executive of the Somali Bankers' Association Yasin Ibar has been appointed CEO of the exchange.'Today's launch is an important milestone, not just for Somalia's financial sector, but for the entire economy,' Mr Ibar said. 'NSES will create opportunities for companies to access capital, for investors to support Somalia's growth, and for our economy to integrate effectively into regional and global markets.'The exchange will initially operate as a private and self-regulatory organisation (SRO) model, working closely with relevant public institutions to oversee and ensure market integrity and transparency.'A properly regulated and inclusive securities exchange can be transformative for Somalia. The Central Bank stands ready to provide technical support and policy coordination to ensure a stable, credible financial market architecture that benefits all Somalis,' said Ali Yassin Sheikh, the deputy governor of the Central Bank of Somalia.
The exchange will initially target sectors critical to Somalia's economic future -- energy, telecommunications, banking, real estate, and agriculture.
Additionally, it will provide a platform for issuing government-backed, Shariah-compliant Sukuk (bonds) to finance priority infrastructure and development projects across the nation.
As part of its preparation, the NSES team will conduct investor education and international roadshows targeting Somali diaspora in Türkiye, Kenya, the United Kingdom, Norway, and the United States, aimed at raising awareness, boosting financial literacy, and building investor confidence.
The exchange is well-positioned to benefit from cross-listings on regional exchanges in Kenya, Rwanda, Tanzania, and Uganda, enhancing Somalia's integration into the broader East African financial market.
The six East African exchanges (Kenya, Uganda, Tanzania, Rwanda, Ethiopia and Somalia) under the auspices of Easea, are keen on the integration of the regional stockmarkets. Burundi still does not have an operational stockmarket.
In April this year, Easea launched the East Africa Exchanges (EAE) 20-Share Index, marking a significant milestone in the integration and development of the region's capital markets.
The index is expected to track price movements and changes in market capitalisation of its constituent firms, offering a transparent benchmark for investors, analysts, and policymakers.
The introduction of the first regional index marked a significant milestone in the growth and deepening of East African capital markets and their economies and bolsters the on-going efforts towards integration of regional stockmarkets.
The EAE 20-Share Index is a market capitalisation-weighted index, comprising a cross-section of the top 20 listed public companies from multiple sectors across Nairobi, Dar es Salaam, Uganda and Rwanda stock exchanges. Collectively, these listed companies represent over 85 percent of the region's equity market.
The companies included in the Index are: Safaricom Plc, KCB Group Plc, Equity Group Holdings Plc, and Co-operative Bank of Kenya, Absa Bank Kenya Plc, CRDB Bank Plc, NMB Bank Plc, Tanzania Breweries Ltd, Tanga Cement Company Ltd, Tanzania Cigarette Corporation, Bralirwa Ltd and BK Group Plc.
Others are I&M Bank (Rwanda) Plc, Cimerwa Plc, MTN Rwandacell Plc, MTN Uganda Ltd, Stanbic Uganda Holdings, Bank of Baroda (Uganda), Airtel Uganda Ltd and Quality Chemical Industries Ltd.
Companies seeking to be included in this index must have their shares primarily listed on one of the participating East African securities exchanges and must have maintained a continuous listing for a minimum of one year on the respective exchange. They should also be recognised blue-chip firms, and demonstrate strong profitability and consistent dividend payment history.
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