Remarks by Mrs. Stella Kilonzo, Chief Executive Capital Markets Authority, During the Official Listing By Introduction of CFC Insurance Holdings Limited Shares On April 21, 2011 at the Nairobi Stock Exchange

The Chairman of CFC Insurance Holdings, Mr Jeremiah Kiereini;

The Regional Managing Director of Liberty East Africa, Mr Mike du Toit;

Other Directors of CFC Insurance Holdings present;

The Chairman of the Nairobi Stock Exchange, Mr Eddy Njoroge;

The Chief Executive of the Nairobi Stock Exchange, Mr Peter Mwangi;

Other Directors of the Nairobi Stock Exchange present;

The Chief Executive of the Central Depository and Settlement

Corporation, Mrs Rose Mambo;

Distinguished guests;

Ladies and Gentlemen:

All protocols observed; 

I am delighted to join you and share some brief remarks on this occasion which marks the third listing by introduction in the history of the Nairobi Stock Exchange (NSE) after Equity Bank and TPS Holdings Limited. This follows one of the most active year in the history of both equities and bond markets in Kenya, during which equities market capitalization averaged Kshs 1 trillion and where the Kenyan stock market was ranked the second highest performer in the African region after Uganda in index returns.

The Capital Markets Authority is cognizant of the key role CFC-Stanbic Holdings has played in the capital markets over the years not just as an issuer of securities but also as a market intermediary. Indeed, CFCStanbic has demonstrated its position as a one-stop for investors, being licensed to engage in a number of regulated capital markets activities such as collective investment schemes and investment banking, while its banking arm has effectively acted as a settlement bank for equities and corporate bonds in Kenya.

Ladies and gentlemen: Let me emphasize that in granting approval for listing via introduction, CFC Insurance Holdings Limited (CIHL) was subjected to exactly the same stringent listing criteria, as it would have gone through if it was raising capital from the public. The fact that there was no capital raising involved did not in any way confer eligibility concessions to the company.

Companies who do not raise capital but still opt to list at the NSE are still able to benefit in two important respects:

First, listing offers shareholders and investors the benefit of price discovery and liquidity, and provide an exit mechanism for thosewho wish to unlock the value of their investment;

Secondly, as a public quoted company, CIHL will now be subjected to continuous reporting and disclosure obligations which will bolster the structures of corporate governance and accountability, and in the process increase shareholder value.

There are other benefits of listing such as raising the public profile and preferential corporate tax treatment among others.

The primary purpose of capital markets is to facilitate mobilization of capital for long-term productive investments. Huge opportunities exist for public and private companies to raise capital for enterprise development through issuance of equity and debt instruments. These opportunities have not been fully exploited particularly by the private sector.

The Government has over the years granted no less than 30 fiscal andtax incentives to issuers and investors through the capital markets. Indeed, in his Budget statement in 2008, the Minister for Finance extended these benefits to companies listing through introduction. We hope that many more companies will emulate CIHL and take advantage of these generous incentives. There is no doubt that there is appetite in the market for viable investment opportunities.

Ladies and gentlemen, as you may be aware the Capital Markets Authority is carrying out a number of key reforms which are geared to taking the capital markets industry in Kenya to the next level. In all these reforms we have been engaging stakeholders at every stage. One of the crucial reforms that has received significant buy- in from the public is the review of the industry's entire legal framework that has culminated in the development of three pieces of draft legislations: Capital Markets Authority Bill, 2011; Securities Industry Bill, 2011; and Central Depositories (Amendment) Bill, 2011.

The enactment of these Bills is expected to provide the market with a more robust regulatory framework that strengthens the independence and governance structure of the Capital Markets Authority as the regulator; while providing a more enabling environment for introduction of new products, services, trading and settlement for the entire market. It also strengthens the role of Self Regulatory Organizations (SRO) as we move into the future. As I conclude I would wish to remind all stakeholders to take advantage of the opportunities available with the launch of the East African Common Market in July 2010 and the expected implementation of the East African Monetary Union. With an expanded market of 126 million people, listed firms should explore the possibilities of cross-border listing and trade, while investors have the opportunity to diversify their investment portfolios, as more investment opportunities become available in both securities and debt instruments.

Once again, I join you in welcoming CFC Insurance Holdings to the growing family of listed companies.

Finally, let me take this opportunity to wish you Happy Easter celebrations!

Thank You!

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