Private companies have been urged to take advantage of the rebound on the the Nairobi Securities Exchange to list.
Speaking during the listing of Longhorn Publishers at the bourse yesterday, vice-chairman Bob Karina noted that the NSE is up about 13 per cent this year "Our market is experiencing a rebound in activity.
The NSE 20 share index is up 12.9 per cent," Karina said. "In the same period, the newer FTSE NSE Index is up 15.48 per cent. Market capitalization is up 15.6 per cent to Sh1.03 trillion."
Karina attributed the rise to a decline in interest rates as investors switch to the equity market for better gains. Longhorn brought to the market 58.5million shares by way of introduction at Sh14 per share. Wycliffe Shamiah, from the Capital Markets Authority, said more enterprises should consider listing to tap into the many advantages offered by being quoted on the exchange. "I would like to encourage other companies to consider listing since it gives benefits such as price discovery to existing shareholders who also get an opportunity to unlock the value of their investment.
Shamiah, who is the director of market operations at CMA, said a new trading board for small and medium enterprises will be set up at the exchange to encourage more enterprises to come to the market. He said the goal should be for the stock market valuation to rise from the current 50 per cent to 90 per cent of the country's GDP.
Similarly, the total value of bonds listed on the NSE should grow from the current 16 per cent to 30 per cent of GDP. Longhorn is the first publisher to list on the exchange and the first new listing on the NSE this year. Other firms which have expressed interest in listing are Deacons expected later this year, IT services firm Seven Seas, and medical services provider AAR which is expected to list in about four years when its strategic investor exits. The NSE is itself expected to list when the process of demutualization of the exchange is completed.