CMA lines up 4 fi rms for NSE listing in 2018

Four firms are expected to list on the Nairobi Securities Exchange next year, ending nearly two years of drought, the Capital Markets Authority has said.

The regulator says another 30 companies have applied to trade shares publicly, with approvals at different stages.

“Four are certain they will list in the next 12 months and 30 others are ready to come to the market,” CMA director for regulatory policy and strategy Luke Ombara said. “This means they have met all the preconditions for legibility to list, but still have to make decisions around restructuring their shareholding because there are also requirements on board balance.”

Under the 10-year Capital Markets Master Plan from 2014, the CMA targets about three to four new listings every year on the Growth Enterprise Market Segment of the NSE in a market dominated by small- and medium-sized enterprises.

Ombara said that although there was a positive pipeline of new listings, there were still challenges hindering potential issuers from listing on the Nairobi bourse. The main challenge, he said, is that most companies are family-owned businesses whose owners are reluctant to relinquish their control. The market has also been largely bearish in the last two years.

“We have done quite a lot to bring the ones that are there currently, but there is still that culture shift which we have not been able to achieve,” Ombara said. “The market was also on a downward trend. Normally, timing is everything when it comes to a listing.”

He said pricing of Initial Public Offering had also contributed to the slowdown in primary listings, adding that the high cost may have been discouraging the potential issuers.

Four firms have exited the bourse since 2013, the latest being auto dealer Marshalls East Africa which delisted on Tuesday. Others are Rea Vipingo, Access Kenya and CMC Holdings.

The NSE has also suspended trading of Atlas African Industries for a 90-day period beginning May 12 due to non-compliance with rules. GEMS is self-regulated by the NSE and has lower entry requirements compared to the Main Income Market Segment and the Alternative Investment Market Segment.