The Nairobi Stock Exchange (NSE) board of directors has renewed chief executive Chris Mwebesa's contract for another three-year term, ending months of speculation over the position since his contract expired in February.

The re-appointment comes barely days after the exit of immediate former NSE chairman, Mr Jimnah Mbaru, who was replaced by Mr James Wangunyu following the bourse's annual general meeting held on Friday last week.

The decision to re-appoint Mr Mwebesa was ratified at a meeting held by the new stock exchange chairman Mr Wangunyu, first vice chairman Bob Karina and second vice chairman Eddie Njoroge on Monday, with the new contract expected to expire in June 2011.

Separation of ownership and management of the stock exchange (demutualization), bringing in additional companies for listing at the bourse and re-building of NSE's public image and investor confidence rank highly among the targets that the board has set for Mr Mwebesa over the next three years.

"My priority is to oversee demutualization of the stock exchange in the next 12 months and to work on re-building NSE's public image," said Mr Mwebesa yesterday in an interview with Business Daily.

The CEO says that though investors still have confidence in the capital markets as shown by the large turn-out in the just concluded Safaricom IPO that attracted approximately 800,000 applicants, the actions of some unethical brokers had eroded NSE's image.

"Demutualization will increase transparency and assist in tackling the negative perception problem among existing and potential investors," says Mr Mwebesa.

Mr Mwebesa's re-appointment partially eases the anxiety in the capital markets, despite the pending appointment of the regulatory body Capital Markets Authority's (CMA) chief executive.

Former CMA chief executive Edward Ntalami quit his position in December last year, with former legal and compliance manager Stella Kilonzo holding the office in an acting capacity since then.

The CMA chief executive is a presidential appointee, while the NSE chief executive's appointment is done by the NSE board of directors.

The number of Kenyans holding investment accounts at the bourse has soared to an estimated 1.5 million while market capitalization has crossed the Sh1 trillion mark, making the capital markets a focal economic sector.

The market watchdog's top position has remained vacant for five months now.

An attempt to recruit a new CMA boss by the recruitment firm, Hawkins Associates, flopped in March.

Mr Mwebesa was at one time considered a front runner for the CMA CEO's job.

The current acting chief executive, Stella Kilonzo, is a CMA board appointee - a situation that critics argue makes her prone to manipulation by board members to whom she is answerable.

Mr Mwebesa was first appointed NSE CEO in 2005, and has presided over the bourse's highest growth period in its 53- year history, making it currently the biggest stock exchange in the region and the 5th largest in Africa in terms of market capitalization.

The former head of business development at AIG Global Investment Company and CEO of Stanbic Investment Management Services has overseen five initial public offerings (IPOs), including mobile phone company Safaricom's IPO which is said to be the largest IPO to date in Sub Saharan Africa.

Other achievements include the installation of the Automated Trading System, and introduction of the NSE All Share Index (NASI).

Critics have however pointed to the bourse's failure to attract more new listings, with the total number of listed companies still at 55, giving an average of about one listing per annum since the bourse was founded in 1954.

It was also during Mr Mwebesa's tenure that one stockbroker, Francis Thuo and Partners went under with an estimated Sh140 million of investors' funds, while Nyaga Stockbrokers, believed to have been the biggest retail stockbroker prior to its liquidity problems, is currently under statutory management.