The Nairobi Securities Exchange (NSE) has a new chairperson. Tom Mulwa, the chief executive officer of Liaison Group, has taken over from Kiprono Kittony, who is now chairing Kenya Airways. In his first interview with the Business Daily, Mr Mulwa speaks about the future of the bourse, why the chairman’s role is far from ceremonial, the quest to attract more listings and retail investors, and how technology can democratise wealth creation in Kenya.
Some people think the position of NSE chairperson is largely ceremonial. What exactly does the office do?
Mulwa: The NSE is far more than a trading floor. It is a public company and an institution that provides investors with confidence that they can enter and exit investments. Before anyone invests in a country, they first look at the strength of its securities exchange because it determines whether they can realise value from their investments in the future.
The board provides the strategic direction of the exchange and appoints the chief executive.
The chairperson works with the board to ensure the institution remains strong. An organisation is only as good as its board. Good leadership is rarely noticed when everything is working well, just as people rarely think about the pilot until something goes wrong.
The NSE has received international recognition, including being ranked among Africa’s top-performing exchanges by Morgan Stanley and earning positive ratings from FTSE Russell. Those achievements reflect effective leadership and sound governance.
The NSE has often announced ambitious listing targets but struggled to achieve them. Has that changed?
Mulwa: We have taken that feedback seriously. Since Covid-19, the exchange has become much more active. In the past two years, we have facilitated more than 10 capital markets transactions, including the Linzi Sukuk, the Talanta Stadium bond, Kenya Mortgage Refinance Company issuances, Safaricom’s additional share capital issue, East African Breweries’ capital raising, and Family Bank’s listing by introduction.
The next major transaction we are looking forward to is the listing of Kenya Pipeline Company. We are determined to sustain this momentum. Raising capital is not limited to initial public offerings. Additional share issuances and bond listings are equally important because they help companies access financing.
We are also working to demystify the stock market. Through technology, products such as Ziidi by Safaricom have already attracted more than 65,000 subscribers. Today, an investor can buy as little as a single share. Our ambition is to have nine million Kenyans participating in the securities market. We want the NSE to belong to ordinary wananchi, not just large corporations. Our mission is to democratise wealth.
Technology is reducing reliance on intermediaries. Does that threaten investment bankers?
Mulwa: We live in the information age. Before visiting a doctor today, many people first search online. The same applies to investing. Investors now have access to information that was once available only to professionals.
That does not eliminate the need for investment bankers. Investing remains complex, and many people still require professional guidance on risk, asset allocation and investment decisions. Those who are comfortable investing independently can do so through a CDS account, while others will continue to rely on professionals for advice. There is room for both approaches
Most recent listings have been bonds rather than IPOs. How do you attract more companies to list?
Mulwa: Family Bank’s listing by introduction is a good example of how businesses should evolve. Entrepreneurs build companies, create value and eventually share that wealth with the public through listing.
IPOs will come, particularly as the government prepares to list more state-owned enterprises such as Kenya Pipeline Company. But listing is like preparing for a wedding—you must ensure the company is ready. We want firms that come to market to meet the required governance and regulatory standards before they list.
Young people appear more interested in gambling than investing in shares. How can the NSE attract them?
Mulwa: Technology is the answer. Gambling has become popular because it is fast and entirely mobile. Investing must offer the same convenience.
Today, our settlement cycle is T+1, meaning investors can buy shares and have their transactions settled by the following day. We have also seen strong uptake of digital money market products, which now hold around Sh260 billion, much of it belonging to young investors.
The perception that investing in shares is outdated is changing. Shares are no longer treated like title deeds that must be stored away. Technology and increasing financial literacy are making the stock market much more accessible to younger Kenyans.
Kenyan investors are often quick to exit the market when prices fall. How can confidence be strengthened?
Mulwa: Investor confidence depends largely on the economy. A stable economy with consistent GDP growth creates confidence that markets will remain resilient.
Strong corporate earnings and reliable dividend payments also encourage investors to stay invested. Many listed companies have maintained attractive dividend records, giving shareholders confidence to hold their investments. Those who prefer less risk can always shift to different counters without leaving the market altogether.
Ultimately, the stock market competes for the same disposable income that households use for food, entertainment and other needs. When the economy performs well and people have more disposable income, they are more likely to save and invest.
Many investors remain scarred by the collapse of companies such as Mumias Sugar. How will the NSE rebuild trust?
Mulwa: Rebuilding confidence is one of our key strategic objectives. We recognise that many investors still carry painful memories of previous market failures.
That is why our strategy focuses on revitalising the NSE. Confidence cannot be restored through words alone; it must be earned through action. Our responsibility is to strengthen the market, improve governance and demonstrate that the exchange remains a trusted platform for wealth creation.
How can the NSE reduce its reliance on foreign investors?
Mulwa: We started by talking about looking inward, and that remains one of our priorities. It is important to have an internationally competitive securities exchange that attracts global investors because that enhances our standing, provides benchmarks and helps mobilise capital. However, heavy reliance on foreign investors also exposes us to capital flight whenever there are global shocks. The more we localise and democratise investing by growing the domestic investor base, the better we will cushion the market against such risks and reduce our vulnerability to external events.
The NSE is described as an indicator of the economy, yet agriculture, which takes about 25 percent of GDP, is not well represented. Why this paradox?
I couldn’t agree more. In our revitalisation journey, we have mapped out the various segments of the economy where we must take deliberate steps to encourage listings, including agriculture, commerce, logistics and others.
That said, Kenya is predominantly a services economy. So, even when you talk about banks, who do they lend to? They finance the very sectors we are talking about. In that sense, banks indirectly provide exposure to those sectors through their listings.
