Diplomat to start Somalia's first stock market

Reuters Middle East

* May initially be based in the Kenyan capital

* Sees banks and telecoms listing their shares

* Regional firms eyeing entry into Somalia

NAIROBI, Aug 8 (Reuters) - A Somali diplomat wants to start

the Horn of Africa's first ever stock exchange in neighbouring

Kenya and he expects telecom, banking and money transfer firms

that have defied decades of conflict to list their shares on the

bourse.

"Somalis are very enterprising people ... and they want to

join other east Africans that have working stock exchanges,"

said Idd Mohamed, Ambassador extraordinary and deputy permanent

representative to the United Nations.

"Initially the exchange will be based in Nairobi, but if the

situation improves we could move it to Mogadishu."

Firms that have continued to thrive in Somalia include

Hormuud Telecom, a private company which is well known even

beyond Somali borders.

Mohamed, who founded the Somalia Stock Exchange Investment

Corporation (SSE) with others, said he expected the bourse to

attract both Somali-owned companies and international firms

wishing to invest in the largely Muslim country and help rebuild

it.

He was speaking at the signing of an agreement with the

Nairobi Securities Exchange (NSE) for provision of expertise and

support in the formation and development of the SSE.

"We are happy to assist them as we have assisted other

countries like Rwanda. We hope we will be able to help them come

up with sharia compliant sukuk bonds and halal equities," said

Peter Mwangi, the chief executive of the NSE.

Islamic sharia law forbids investments that pay interest or

those made in certain companies such as brewers or gambling

firms.

Together with Somali government soldiers, African Union

troops who are battling the Islamist al Shabaab militants have

made significant progress over the past year, bringing in a

measure of normality to the capital and other parts of Somalia.

Those gains by the government and African forces, which

followed many hard battles, have prompted nations like Turkey to

re-open their embassies in Mogadishu.

Regional firms, including banks in east Africa's largest

economy Kenya, hope to follow in their footsteps when peace is

fully attained.

If those companies do eventually move in, they will join a

bunch of oil explorers, who are already active in the

semi-autonomous region of Puntland.

Somalia has no formal banking sector and its people rely

heavily on money transfers, estimated to be over $2 billion

annually, from diaspora communities in Europe, North America and

the United Arab Emirates.

(Reporting by Kevin Mwanza; Writing by Duncan Miriri; Editing

by Jon Loades-Carter)

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