Green finance next big thing for securities–NSE chief

Green finance presents a big opportunity for investors in the country, Nairobi Securities Exchange Chief Executive, Geoffrey Odundo has said.

He said many foreign investors are keen on investing in the green bonds as matters climate are currently big in the global economy.

“Sustainability financing is a great space for the Kenyan markets for us, we are focusing on platforms that offer this bonds and they are many corporates that are willing to invest in this,” said Odundo.

Proceeds raised on the capital markets through green bonds essentially fund climate adaptation and emissions reduction projects while, at the same time, promising sustainability-focused investors a return.

Green financing for Kenya presents opportunities in real estate investment trust, equity companies and also bonds.

“Kenya being a hub of green financing in many ways from geothermal to wind for electricity, some aspects of housing has seen a large number of social impact investors coming into the country,” said Odundo.

The country has the first Green D-Reit in the world, this is a Green Real Estate Investment Trust where houses a firm could invest in housing but building green housing that helps in the fight against climate change.

Acorn Holdings raised $41million in 2019 towards building sustainable student accommodation units in Kenya, making it the first green bond offering in the country.

The Nairobi bourse has already launched a green bond which has been attracting a large number of foreign investors, and according to Odundo they are in works with the government to launch a sovereign green bond.

“The green bonds bring many foreign investors will be a great boost to setting up Kenya as an international finance centre as we will get high dollar inflows and also many firms will setup their headquarters in the country,” said Odundo.

Leading investment firms such as Blackrock have started focusing some of their assess on green financing, therefore if Kenya invests in this this could be a big boost for our markets.

The green bond market, however, remains relatively nascent in emerging markets and sub-Saharan Africa, though it shows promising green shoots for exponential growth in future

According to an international paper, the United Kingdom is set to launch its first sovereign green savings bond that will see retail investors bu into projects concerning the greening the economy.

The Nairobi Securities Exchange(NSE) has been recording improved performance in 2021.

Traded turnover in both bonds and equities markets at the  NSE rose last month, buoyed by higher appetite for large cap stocks and infrastructure bonds.

Data from the stock exchange shows that bonds turnover rose by 41 per cent to a five-month high of Sh74.1 billion last month from Sh52.7 billion in January.

The value of equities traded went up by 22 per cent to Sh10.8 billion from Sh8.8 billion in January.

The activity on the equities market was backed by price increases on large cap stocks such as Safaricom , BAT Kenya  and Co-operative Bank , with investors eyeing dividends in the case of Safaricom and BAT.

“We are fairly optimistic about this year as the markets are performing really well, we are also eyeing to have more large listings at the Exchange,” said Odundo