This archive report was first published on 19 June 2020.
Published on June 19, 2020, the Capital Markets Authority (CMA) has sounded an alarm over the dominance of five listed firms at the Nairobi Securities Exchange (NSE).
The top five companies by market value currently account for nearly 74.14% of the NSE market capitalization, the highest in the last four quarters, further increasing the exposure risk that the Kenyan market faces.
The five firms are Safaricom, with a market capitalization of KSh1.2 trillion, accounting for 60% of the value of NSE listed firms. This is followed by Equity, EABL, KCB Group, and Co-operative Bank.
The CMA warned that market concentration remains a key risk within the Kenyan Capital Markets landscape and intends to diversify the number and quality of listed entities.
To achieve this, the CMA will work with market players, including the Privatization Commission, Kenya Private Sector Alliance, and Kenya Association of Manufacturers, to identify potential issuers within the Kenyan market.
Some companies have expressed interest in going public within the next 2 to 3 years, including Jamii Bora, Vitaform, and Tuskys, which are on the list of firms that have already expressed interest in joining the bourse.
The Nairobi Securities Exchange has crafted the Ibuka program, which nurtures Kenyan firms and prepares them for listing. Companies under the Ibuka program include Homeboyz, APT Commodities Limited, Globetrotter Agency Limited, Moad Capital Limited, and Bluenile Rolling Mills Limited.
