CRDB TO CROSS LIST ON NAIROBI BOURSE

CRDB Bank shareholders welcomed the decision to cross list the bank's shares on the Nairobi Stock exchange (NSE). A move that would expand the market for the bank's shares.

Speaking at the bank’s Annual General Meeting in Arusha yesterday, shareholders observed that by cross listing onto NSE, the volume of trading of the bank’s shares will go up and that would ultimately push up the share prices, as well as the returns to shareholders.

Mr. Iddi Rajabu Chongi from Moshi, Kilimanjaro Region said expanding wings to Nairobi’s bourse was an important step that would help in tapping the vast market opportunities available in the East African Region.

He, however, cautioned the bank's management to take all the necessary precautions to ensure there is a smooth entrance and growth. Mr. Laurean Malauri, a shareholder and stock broker said business at the Dar es Salaam bourse is small, thus the bank’s decision to cross list onto the Nairobi bourse.

“Cross listing of the CRDB shares on the NSE was important because about 50% of the ownership of the shares of the bank are retail, whereby selling and buying is at most times dictated by circumstances,” he said.

But with firms whereby the majority of the shareholders are large companies, trading of shares has a different structure because they focus on future benefits instead of short term returns.

Similarly, by lifting restrictions imposed by the government on foreign participation at the bourse, this will be an important solution to intensify and make the local market more vibrant.

He said the cross listed firms at the Dar bourse are currently trading low due to restrictions. Some of the cross listed stocks at the Dar bourse are the Nation Media Group, Kenya Airways, East African Breweries, Kenya Commercial Bank and Jubilee Insurance.

However, Mr Abeid Mwasajone expressed worries on how the bank could benefit from cross listing, while prices of the shares are currently very low.

Responding to the question, the CRDB Bank Managing Director, Dr. Charles Kimei, said with cross listing, the bank will benefit from price discovery because, most shares at the Dar bourse, including CRDB were still undervalued.

“If we were to compute the book value of shares, the CRDB shares would be valued to over TZS 500 shillings from the TZS 310 shillings currently,” he noted.