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The Nairobi Securities Exchange Launches New Trading Platform

On 17 December 2020, the Nairobi Securities Exchange (the NSE) launched an Unquoted Securities Platform (the USP). The USP will function in accordance with its operational guidelines (the Guidelines) published on 11 December 2020. The Guidelines are available here.

The USP is an over the counter securities platform that utilises broker-dealer networks for the trade of securities. It has less stringent listing requirements and issuer obligations have opened a viable alternative for unlisted companies to access capital markets and long-term funding as issuers are enabled to raise finance through private placements. The USP also provides a boost to institutional and retail investors as it provides investors on the platform an accurate free-floating price of the securities of unlisted companies.

Key Considerations for Issuers

For admittance onto the USP, prospective issuers of the USP securities must meet the eligibility requirements of the Management Committee appointed by the NSE. The eligibility requirements are listed in the Guidelines, with the key requirements being, among others, the incorporation status of the issuer, articles of association amenable to USP securities and details of the board and management of the issuer. However, the eligibility requirements are non-exhaustive and the Management Committee may request further criteria as deemed necessary.

A prospective issuer will also need to appoint a registrar, to maintain a record of beneficiary holders of securities, and a custodian (licensed by the Central Bank of Kenya) for the safekeeping of USP securities, cash and other assets on behalf of the investors. Once the application documents have been submitted, the Management Committee will relay their decision to the prospective issuer within twenty-one (21) days.

If an application is accepted by the Management Committee, the issuer will have continuing obligations to the NSE, including disclosure requirements, which entail the disclosure of all material information in relation to the issuers business, financial statements and copies of notice of AGMs and EGMs. Additionally, issuers will be under an obligation to avoid the events of default under the Guidelines, such as: failure to distribute declared dividends and non-payment of interest of USP securities in accordance with the published timetable. Failure to meet continuing obligations may result in the suspension or expulsion of the issuer from the USP.

Key Considerations for Investors

To start trading on the USP, investors must be registered to an NSE authorised USP Trading Participant Agent (broker). In order to register with a broker, individual investors will be required to provide the broker of their choice with their full name, identity documents, contact details and passport (if they are foreign nationals). Investors that are entities will need to provide the broker with documents, such as, among others, the legal status and constitutive documents of the entity, board resolutions allowing the entity to invest and the identities of the directors.

Each investor authorised to trade on the USP is furnished with a unique USP securities trading account with a unique Trade Identification Code. The USP is open for trading on working days from 0900Hrs to 1500Hrs and investors can trade freely within this period. Trades made after the closing of the USP will be transacted at the next opening of the platform.

Investors will need to consider the maximum order size as trades over this limit will require prior disclosure with the NSE. In accordance with the Guidelines, trade volumes that exceed 20% of the total free float of an issuers USP securities will have to be disclosed to the NSE a day prior to the transaction.

For further information please contact Benedict Nzioki or Walid Khan.

PwC reports global revenues up 3% to US$43 billion

For the 12 months ending 30 June 2020, PwC firms around the world had gross revenues of US$43 billion – up 3% in local currency and 1.4% in US dollars.

During the first nine months of FY20 to the end of March, revenues grew by nearly 7% over the same period last year with increases across all lines of business and in every major market. From April to June, revenues were significantly impacted by the lockdown and subsequent slowing economies as countries around the world fought the COVID-19 pandemic. Compared to the same three months in 2019, revenues were down from April to June 2020 by 6%.

“First and foremost the COVID-19 pandemic has been a human tragedy that has deeply affected the lives of many people around the world including members of our PwC family, their relatives and friends and our heartfelt condolences go out to all those who have lost loved ones,” said Bob Moritz, Chairman of the PwC Network.

“Since the pandemic struck, our priorities have been the safety and wellbeing of our people, protecting and preserving jobs, and helping our clients and the communities in which we live and work deal with the impact of COVID-19. I am proud of what we have done over the last year and the way our people have adapted quickly to a huge amount of change while at the same time continuing to connect, collaborate and innovate for the benefit of our stakeholders across the world.”

“While the last few months have been very challenging for everyone, we have re-focused our business to help our clients manage the immediate impacts of the pandemic and reinvent their businesses for future success. It has never been more important to provide our stakeholders with high quality services. We have also continued our significant investments in technology and upskilling our people to help build a sustainable PwC for the future. Our investment in technology was borne out at the height of the lockdown when 95% of our 284,000 strong workforce were operating out of the office with no interruption to the service we were able to provide”, added Bob Moritz.

Revenues across the world

In the Americas, revenues rose by 3% with a particularly good performance from businesses in the United States and Canada. Revenues in Western Europe were up by 2%, while in Central and Eastern Europe, revenues grew by 4%.

Revenues from the Middle East and Africa rose by 10% with a strong result from the Middle East where revenues were up 14%. Across Asia, revenues grew by 5% while in Australasia and the Pacific, revenues were down 1% reflecting difficult trading conditions throughout FY20.

Regional growth numbers for the full year FY20 mask the impact of COVID-19, with all regions performing as anticipated up to the end of March 2020 and then feeling the full impact of the economic restrictions caused by lockdowns in the months of April, May and June. For the last three months of FY20, in most markets around the world we experienced declines in revenues compared with the same period in FY19 with falls in revenues of up to 30% in certain countries.

Revenues by line of business

Around the world, our businesses are focused on providing high quality services that help our clients respond to an ever more complex and challenging environment and address current and future opportunities. While all our lines of business continued to grow in FY20, each was impacted by the economic effects of COVID-19 and we expect market conditions to be challenging for all our operations as we go into our new financial year.

Assurance: Assurance remains PwC’s largest operation across the world and our brand defining business, serving key stakeholders and helping to build trust in the world’s capital markets. In FY20, revenues from our assurance operations grew by 3% to US$17.6 billion, driven by continued strong demand for our core audit. As management and other stakeholders seek insight into operations, risks and performance, and to increase confidence and resilience in business, we have seen continued strong growth in our broader assurance services, such as internal audit and governance, risk and controls. Demand for our digital risk solutions has also remained strong as companies look for support as they accelerate their transition to the Cloud. With almost 119,000 professionals, PwC is the world’s largest provider of assurance services.

Advisory: PwC Advisory operations grew by 4% to US$14.7 billion. This growth was driven by high demand across the world for advice on strategy, business transformation and value creation in the first nine months of the financial year. Our advisory business differentiates by bringing together consulting, deals and cybersecurity professionals, and our operations benefited from increased teaming with our tax and risk assurance colleagues to provide a more integrated service for our clients that gives the advice and support they need from strategy right through to execution. PwC Advisory now employs over 71,000 people.

Tax & Legal Services: PwC Tax & Legal revenues grew by 2% to US$10.7 billion, with demand for tax reporting and strategy, people and organisation and legal services in the first nine months of the year offset by the impact of the pandemic in the final three months. Guided by our PwC Global Tax Code of Conduct, the over 55,000 professionals in our Tax & Legal Services teams use their knowledge and expertise to help clients – ranging from individuals to the largest global corporations – to navigate complex and challenging environments, address people and legal issues, and comply with their tax and reporting responsibilities.

The year ahead

“While we adapted quickly to many of the new challenges that the COVID-19 pandemic brought, there is no doubt that the next 12 months and beyond are going to be difficult. Our economists are predicting that the global economy will contract by 5.5 % by the end of 2021 and while different countries will recover at different rates it is clear that the economic downturn will impact us and our clients across the world,” said Bob Moritz.

We are now very clearly focused on a number of priorities.

  • Jobs: Doing the right things to preserve jobs for our people, continue to invest in building the workforce PwC needs for the future, while maintaining the sustainability of our operations. Unfortunately we have seen some job losses in a few markets around the world, particularly in the advisory business, but we are working hard to limit these by containing non-essential costs and investments.
  • Safety and Wellbeing: Where we are returning to office based work, ensuring that our people are safe and comfortable and that we have processes and technologies in place to protect our people in line with relevant safety protocols. And where our people remain working from home, we continue to provide the support that they need to meet the challenges this can bring.
  • Quality: The uncertainty created by the pandemic and its economic impact has placed an even greater focus on the importance of trust in institutions, information and increased transparency. Investing in the enhancement of the quality of all of the services we provide to our stakeholders remains our number one priority, including continuing to invest the US$1 billion we announced last year to drive quality and innovation by making us the most cloud-enabled organisation in the world.
  • Clients: Supporting our clients across the world as they deal with the impact of the pandemic and look to restart operations, repair their balance sheets and rethink their business models.
  • Innovation: Driving and scaling up innovation right across our network and the development of new products and services. As our stakeholders grapple with the challenges of the current economic environment, it is vital that we are able to advise and support them on the best ways to construct sustainable businesses for the future.
  • Upskilling: Upskilling our own people and collaborating with UNICEF in support of Generation Unlimited to help upskill young people across the world has become even more important as the pandemic has accelerated the use of technology and remote working. Despite the economic uncertainty, we continue to invest heavily to help our own people and others better prepare for the new world of work.
  • Diversity and Inclusion: Redoubling our efforts to create a PwC culture where everyone feels valued, listened to and has the opportunity to grow and succeed and taking a leading role in the global dialogue on diversity. We have created our first global diversity and inclusion leadership council.

“The pandemic brought many challenges but it also brought the opportunity to reflect and to some degree rethink the future. How we work together, how we use technology, what real estate we need, whether we need to travel so much, how to innovate, how to connect with our stakeholders and how to prioritise our health and wellbeing. These are all issues that we are actively working on as we think about the PwC of tomorrow,” said Bob Moritz.

The PwC Global Annual Review will be published in October 2020 and will cover in more detail how PwC responded to the COVID-19 pandemic, the work that we do with our clients, stakeholders and the communities where we operate, how we supported our people, the results of our quality inspections and how we are embedding a high-quality culture across PwC, and the actions we are taking relating to important issues such as diversity and inclusion.