Ruto tells NSE to reduce listing conditions for small firms
- Deputy President William Ruto has urged the Nairobi Securities Exchange (NSE) to come up with plan that will see more firms listed.
- He said it was ironical that the NSE is ranked fifth largest in Africa yet only a few firms control close to 80 per cent of its activities.
- Mr Ruto said there is need for an independent audit to find out what is keeping potential companies from being listed.
Deputy President William Ruto has urged the Nairobi Securities Exchange (NSE) to come up with plan that will see more firms listed.
He said it was ironical that the NSE is ranked fifth largest in Africa yet only a few firms control close to 80 per cent of its activities.
“There must be a problem somewhere. Are there real benefits of listing at the stock exchange? If so, are they attractive enough?” the DP posed.
Mr Ruto, who was speaking during a meeting with NSE officials in his Karen office, said there is need for an independent audit to find out what is keeping potential companies from being listed.
He noted that the securities markets makes a crucial contribution to the economy and should be enhanced to include small and medium-sized enterprises.
“NSE has the potential of helping the government and Kenyans realise the Big Four Agenda. The listing requirements however need to be reduced. Why require companies to lose a minimum of 30 percent stake and attract only a handful when you can put the threshold at five per cent and attract 1,000 new firms?” Mr Ruto posed.
On his part however, CEO Geoffrey Odundo noted that incentives given to the said companies have done little to bring them on board.
“The government has done a lot to boost the securities market. However, we have not managed to attract new, large players.
“The reasons being that some firms are not comfortable with the disclosure requirements, fear of losing control, relatively weak macroeconomic environment and the perception that the cost of listing is a bit high,” he said.
He echoed the DP’s sentiments that more needs to be done to attract more firms and said they would work with the government to change the situation.
During the meeting, a new plan was proposed where incubators and accelerators segment are introduced to bring on new firms to the list.
The incubators segment will host firms that are ‘too-important-to-fall’ and those with national interest.
Accelerators segment will be the stage where firms do final preparations for listing at the NSE.
Mr Odundo revealed they are targeting at least 250 firms in the new plan dubbed “Rapid Mass Listings” strategy.
“We are going to do this in stages. We will prepare and package all firms that have appetite to be listed. Importantly, there will be minimum compliance requirements,” said Mr Odundo.
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