Kenya Lists First Islamic Bond on Stock Exchange

NAIROBI, (Xinhua) – Kenyan President William Ruto on Wednesday announced the listing of the country’s first Islamic bond, the Linzi Sukuk at the Nairobi Securities Exchange (NSE)’s Unquoted Securities Platform (USP), making the product the first Shariah-compliant product to be admitted on the platform.

The bond is a 3-billion-shilling (23 million U.S. dollars) Islamic secured residential-based security with a maturity period of 15 years offering an internal rate of return of 11.13 percent.

Speaking in Nairobi, the capital of Kenya, during the listing of Linzi Finco Trust Islamic secured residential lease security (Linzi Sukuk) on the NSE, Ruto assured investors of a conducive business environment, noting that Kenya is open and safe for business, pointing out that the country’s investment legal framework provides adequate investor protection.

“I want to assure investors that I will go out of my way to make sure that Kenya is stable and safe for investors to unlock their potential in a peaceful environment,” he said.

The president said bonds will not only promote financial inclusion but also broaden market access, aligning with the global move towards more stable and robust economic growth.

Ruto noted that the government is pursuing ambitious reforms that will turn Kenya into a regional business hub, saying no one will be allowed to impede the progress of the country.

He noted that investor confidence has been sustained by resilient financial markets and stable macroeconomic indicators. “To maintain this trend, the government is committed to entrenching a predictable business and economic environment through appropriate policy measures,” he said.

Shariah-compliant funds are investment funds governed by the requirements of Shariah law and the principles of the Islamic religion.

Sukuk, also known as Islamic bonds, are financial instruments that comply with Shariah principles.

Among the most prominent of these is a prohibition of interest payments, a defining aspect of Islamic finance.

During the listing, Ruto warned individuals involved in corruption, saying the law will be amended so that corruption cases can be concluded within six months.

“We will deal with accountability issues with the seriousness they deserve,” he said, noting that the government will deal ruthlessly with those who misuse public funds, pointing out that these resources should always be used for the intended purpose.

The president said the ongoing legal, policy and economic reforms are fundamental and are aimed at boosting the economy and developing competitive capital markets.

He pointed out that a robust, efficient, and transparent capital market is vital for providing liquidity and raising necessary capital which, in turn, supports the overall economic plan.

The Kenyan leader said the policy is set to enhance corporate governance and accountability, aligning the standards of state corporations closely with those of listed companies.

“This will restore investor confidence and ensure that these entities can leverage private capital more effectively,” he said.

The president urged Kenyans to invest in the stock exchange, especially in bonds, shares, and forex trading.