Listing of companies set for major review

By James Anyanzwa

Plans are underway for Nairobi Stock Exchange (NSE) to start approving listing of new companies.

The move is part of the recommendations for the on-going review of the Capital Markets Authority (CMA) Act aims at improving efficiency in the operations of the stock market.

Currently, companies seeking to sell shares to the public through the Initial Public Offerings (IPOs) have to be endorsed by CMA.

"We have been overhauling our regulations and those are some of the recommendations for CMA to cede some of the functions," Ms Stella Kilonzo, the CMA chief executive said last week.

The NSE Chief Executive Peter Mwangi acknowledged that NSE should control the process for approving new listings.

In 2009/10 Budget, the Government amended the relevant law to review the process of listing and reduce the listing fee by 50 per cent for new public offers of equity. The reduction was aimed at easing access to capital for expansion and avail the opportunity for more Kenyans to own local companies.

Although the Government has in the past availed numerous fiscal incentives to attract listings on the NSE, privately-owned companies have not responded to the gesture.

One of the arguments from the market players is that the listing process is long and attracts a very high listing fee at the rate of 0.3 per cent of the value of the issue without a cap.