Joseph Bonyo
14 December 2009
Nairobi — The Co-operative Bank of Kenya has been included in the computation of the Nairobi Stock Exchange 20 share index.
The bank, replaces Centum Investment as an index company in the finance and investment segment.
In a statement on Monday, NSE chief executive Peter Mwangi said that the board had given the nod after a review.
"In line with best practice, the market indices are reviewed periodically to ensure that they reflect an accurate picture of market performance," said Mr Mwangi.
The NSE has two indices; the 20-share Index and the more inclusive All Share Index popularly referred to as NASI.
The former is price weighted while the latter is based on market capitalisation.
According to Mr Mwangi the review was based on among other factors market capitalisation, shares traded, number of deals and turnover.
These measurements are carried out over a trading period of 12 months.
Co-operative Bank was listed at the bourse in December last year following an Initial Public Offering.
The bank raised Sh5.4 billion from investors under challenging market conditions.
Last year, mobile phone service provider Safaricom Limited was added to the index barely a month after listing.
This was contrary to the regulation that holds that a company should have been trading for at least one year before inclusion.
Safaricom replaced TPS Serena in the commercial and services sector.
"Safaricom's inclusion will enhance the technical and market reflection accuracy of the NSE share index. The changes have been endorsed after due regard to factors of market capitalisation, turnover, shares traded and the liquidity of the respective counters," said then NSE chairman Jimnah Mbaru of the decision.
Meanwhile, Co-operative Bank has said that it will soon set up five additional branches in Southern Sudan.
Board chairman Stanley Muchiri said that plans were at an advanced stage in opening the new outlets.
He spoke at a fun day for its Jumbo Junior account holders on Sunday.
Account holders have increased to 70,000 and Sh1.5 billion in deposits in 14 years.