10 Companies Pledged By Gov’t To End Six-Year IPO Drought In NSE Listing

The government has promised to privatize ten companies in the next year through the Nairobi Stock Market to end the six-year listing drought at the Nairobi bourse.

President Ruto said the government plans to bring six to ten companies to the market through Initial Public Offerings (IPOs), urging the private sector to also list at least five firms at the Nairobi Securities Exchange (NSE).

The government has previously earmarked 26 companies for privatization, including the lucrative Kenya Ports Authority and Kenya Pipeline alongside loss-making lenders, collapsed sugar millers and state hotels that have been run down over the years.

The President hopes that the listing of government parastatals will boost the NSE, which has not had an IPO since October 2015, when the Stanlib Fahari REIT was listed.  The last successful privatization by the government was the Safaricom initial public offering in 2008.

“As we prepare between six and ten companies for listing, in the stocks exchange in the next twelve months, and I promise you we will deliver on that commitment, I also want to encourage the private sector as we bring ten companies, please bring five,” President Ruto said during the launch of the NSE Marketplace.

According to the 2017 Africa Capital Markets Watch by PricewaterhouseCoopers (PwC), the NSE has only been able to raise Ksh4.2 billion ($42 million) through two IPOs offered in 2014 and 2015, raising Ksh700 million and Ksh3.5 billion, respectively.

Currently, the bourse has 63 listed stocks with a total market capitalization of Ksh1.9 trillion, of which Safaricom controls 50 percent market share.

Kenya’s capital markets have lagged behind African peers in IPOs and other secondary listings in the last six years.