ARM
ARM Cement
ARM Cement and Deacons EA
Atlas Industries
Bank of Kigali
Companies
DCON
Disqus
Express
FILE
GEMS
Geoffrey Odundo
Ibuka –Swahili
Initial Public Offer
JavaScript
KenolKobil
Nairobi Securities Exchange
NSE
Rubi Energie
Top
UNGA
Unga Ltd
XPRS

Bourse ushers 2019 on a listing drought

The number of listed firms only rose by one last year, the sole new entrant being the Bank of Kigali through a cross listing from the Rwandese exchange in December, while ARM Cement and Deacons EA joined Atlas Industries on the list of suspended stocks at the bourse. The market has been without an Initial Public Offer (IPO) since October 2015, when the Stanlib Fahari I-Reit hit the market, while there have only been five listings by introduction since 2014.The bourse is also facing up to increased prospects of delistings, with firms that are the subject of takeovers going this route.

Nairobi Securities Exchange CEO Geoffrey Odundo. At least 13 largely family firms are reportedly looking to list. FILE PHOTO | NMG

The bourse’s prolonged listing drought persists going into the New Year, denying market players added investment options at a time when returns in the economy are shrinking. The number of listed firms only rose by one last year, the sole new entrant being the Bank of Kigali through a cross listing from the Rwandese exchange in December, while ARM Cement #ticker:ARM and Deacons EA #ticker:DCON joined Atlas Industries #ticker:ADSS on the list of suspended stocks at the bourse.Although the number of listed firms has increased from 55 to 65 in the past decade—with a high of 67 in 2017— the envisaged growth led by the Growth Enterprise Market Segment (Gems) has failed to materialise.

13 firms plan to list at the NSE

The market has been without an Initial Public Offer (IPO) since October 2015, when the Stanlib Fahari I-Reit hit the market, while there have only been five listings by introduction since 2014.The bourse is also facing up to increased prospects of delistings, with firms that are the subject of takeovers going this route.Two firms—Unga Ltd #ticker:UNGA and Express Kenya #ticker:XPRS — failed in their quest to delist from the bourse in 2018 after takeover bids by key shareholders flopped.Oil marketer KenolKobil is, however, likely to exit the market in the first half of this year should the buyout bid by French firm Rubi Energie go through as expected.Attention now turns to the new incubation and acceleration programme called Ibuka –Swahili for emerging –through which the Nairobi Securities Exchange (NSE) is hoping to mentor firms into joining the bourse.

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“This programme will enable companies unlock their growth potential through a well-structured incubation programme that places a special focus on enhancing the select companies’ business structure, visibility and ability to attract investment among local and international investors,” said NSE chief executive Geoffrey Odundo when launching the platform on December 17.He added that at least 13 largely family-owned firms are seeking to sell shares to the public, with some now set to participate in the new programme to prepare for the move. Selected companies are expected to be mentored for 10 months on how to enhance visibility to local and international investors.They will also gain access to financial advisers and consultants, and guided on how to improve their business structure as they prepare to go public.

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