The Nation (Nairobi)
30 June 2009
editorial
Nairobi — Buoyed by favourable macroeconomic policies and signs of the global meltdown bottoming out, the Nairobi Stock Exchange has shown signs of recovery. That is good news for many investors who have lost billions in the bear market.
However, in the midst of this optimism Olympia Capital is showing disquieting signs. Though one of the least active on the main investment segment, the firm's health is of great concern, for two reasons.
First, because it is a listed company, Kenyans have invested heavily in it. Two, as recently as 2007, the firm did a rights issue in which it reaped Sh420 million from the then bullish market.
To be sure, many firms did the same, and the results for investors have so far been mixed. But for Olympia Capital, formerly Dunlop, the selling point was that it was investing in a South African firm, Plush.
However, recently, it announced the investment had flopped, and thus it was selling off.
We would be the last to demonise business failure particularly in the midst of an economic recession.
Yet, we challenge the Capital Markets Authority and the NSE to ease public scepticism about the quality of vetting done on firms seeking cash from the bourse.
We need to be assured that this is not yet another Uchumi where Sh1.3 billion was lost in a curious rights issue.
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