ASDAQ – ASSOCIATION OF SECURITIES DEALERS AUTOMATED QUOTATION SYSTEM
Will this be the Kenyan version of NASDAQ??
ASDAQ is meant to be an over the counter trading board, that will list companies that do not meet the rules of the Nairobi Stock Exchange to be listed and in particular in the AIMS – Alternative Investment Markets Segment where the requirements are less stringent.
This will enable investors get access to more riskier alternatives but also get exposed to better returns and on the counter provide funding to companies that are coming up but are still too small to be listed in the NSE.
The model has worked in other countries and is a real revelation in Kenya especially putting in mind that private equity companies are very few and can’t support the growing number of companies coming up. Banks have also let down the small businesses and this is a good alternative.
Though a great idea, there are struggles surrounding this initiative on the ownership structure to be adopted and CMA approval. According to reports, 40 out of 100 shares in ASDAQ have been issued to registered stock brokers, each getting 2 shares while the rest remains in the balance. Rumour has it that Transcentury Group was interested but some board members of ASDAQ are refuting their involvement.

The Capital Markets Authority responded to the reports by claiming that it had not received nor approved any application for an OTC market from ASDAQ as reported.
But also acknowledged the need for access to capital markets by the small and venture enterprises though the Govt. has to developed a regulatory framework to govern an OTC market ensuring that its transparent and public’s interest is safeguarded.
To this end CMA claims its studying a proposal for an OTC market.
The NSE not should view ASDAQ as a direct competitor since companies that will be listed here, would not have otherwise made it to the stock exchange and are actually likely to graduate to the NSE after meeting the minimum requirements.
Companies that can be listed here include Wananchi Online, Coast Cables, Kapa Oil, Actis etc.