NSE top boss exits, joins rival regional exchange
From left: Nairobi Securities Exchange Director, Derivatives Market Terrence Adembesa, Phillip Odera, Chief Executive, Stanbic Bank, and Executive Director at SBG Securities at the launch of M-shares, the country’s first ever mobile platform on USSD *209# at the bourse on September 26, 2017.
What you need to know:
- Mr Adembesa had been the chief officer in charge of the derivatives market at the bourse.
- Sources told Nation that the officer had already taken up his role at the newly established EABX.
A top executive of the Nairobi Securities Exchange (NSE), Terrence Adembesa, has exited to take up a new role as the chief executive of the new East African Bond Exchange (EABX) that is set to rival his old employer for business.
Mr Adembesa had been the chief officer in charge of the derivatives market at the bourse.
Sources told Nation that the officer had already taken up his role at the newly established EABX -- a regulated over-the-counter trading house for fixed income securities. It was incorporated on March 4, 2019, under the Companies Act of 2015.
Mr Adembesa’s move to the EABX is vital because he will finally roll out its operations after years of planning — turning the pressure on the NSE with which it is expected to compete for the same business.
The NSE recently admitted that the EABX would present competition in the capital markets.
“We have fully automated this market. We have reduced the trading cycle from three days to a day. We have worked with our partners Refinitiv to provide a platform for negotiating and agreeing on transactions which makes it very easy for trades to be confirmed securely. So, we have done everything right. We at the exchange did not see the merit in having a second exchange, especially in a market that is still this young,” NSE chief executive officer Geoffrey Odundo, told NTV in January this year.
Fixed income activity contributes about seven percent of total revenue at the NSE, a pointer to what the exchange could lose should the fixed-income activity be routed through EABX. The NSE’s total income stood at Sh714.3 million in the year ended December 2021.
A recent rebound of the corporate debt market has been the sweet spot with the market having attracted four additional listings bringing the total number of outstanding corporate bonds to five.
During his tenure at the NSE, Mr Adembesa oversaw the derivatives market’s activity grow from a turnover valued at Sh20.5 million in 2019, when it operated for six months, to Sh289 million in 2021.
The average daily turnover in the derivatives market rose from Sh400,000 in December 2020 to Sh1.5 million in December 2021.
The total number of outstanding positions held by investors in the derivatives market at the close of 2021 was 939 contracts worth approximately Sh36 million.
