East African Bond Exchange Set to Revolutionize Kenya’s Debt Market

The upcoming launch of the East African Bond Exchange (EABX) heralds a transformative era for Kenya’s debt market and promises enhanced liquidity, transparency, and growth opportunities.

Terrence Adembesa, CEO of EABX, envisions exponential development in Kenya’s bond market, which currently lags behind international standards in terms of size and activity.

Kenya, boasting the third-largest economy in sub-Saharan Africa, sees corporate debt issuance at a mere 0.2% of its GDP, a fraction compared to Asian economies where it ranges between 20% to 30%.

EABX aims to address this gap by providing a platform for efficient trading of government domestic debt and facilitating improved pricing mechanisms.

With the potential to trade three to four times the existing 5 trillion shillings ($31 billion) of outstanding liabilities, EABX holds promise for invigorating the Kenyan debt market.

It seeks to empower issuers with better pricing strategies while providing investors with enhanced visibility and cost savings.

The exchange, scheduled to commence operations in the first half of the year, received bids totaling approximately 2.6 billion shillings, surpassing its 2 billion shillings target.

The Kenya Bankers Association and UK-backed development agency FSD Africa collectively hold a majority stake of 52% in EABX, signifying strong support and confidence in its potential impact.

EABX’s roots trace back to 2009 when the Bond Market Association initiated efforts to establish a self-regulatory organization for the fixed income market.

As EABX prepares for its debut, it aspires to extend its footprint beyond Kenya, facilitating trading in fixed-income securities across East African Community member nations, including Tanzania, Uganda, Rwanda, Burundi, Democratic Republic of Congo, South Sudan, and Somalia.