This archive report was first published on 13 August 2019.
As of August 9, 2019, British American Tobacco (BAT) Kenya's market capitalization had dropped by nearly Ksh.15 billion since the start of the year, with its share price gaining Ksh.11 to Ksh.515.
The company's average daily turnover fell to Ksh.9.6 million between April and June, down from Ksh.81 million in the first quarter, according to data from the NSE and the Capital Markets Authority (CMA).
With an average liquidity rate below 0.5 percent, BAT's counter has become one of the least liquid on the NSE, ranking sixth among listed firms.
The NSE's derivatives market, launched in July, has seen little to no action, with BAT posting no single futures contract in the first month of trading.
As of August 9, BAT had featured nil futures listings in the trading week, raising concerns about its status on the new market.
The NSE derivatives unit has stated that it is keeping a close watch on the counter, but the company's failure to meet the required daily turnover of Ksh.7 million and market capitalization of Ksh.50 billion may lead to its expulsion from the market.
Stocks on the derivatives market are required to maintain an average daily turnover of at least Ksh.7 million and a further Ksh.50 billion in market capitalization across a six-month scrutiny period.
The regulations aim to ensure liquidity for investors trading on the platform, but the first month of futures trading has been marked by low contract listings and uptake.
Despite the challenges, the NSE is optimistic about the potential of the derivatives market, citing the recent increase in contract listings to 418 across the last week.
