Firms suspend public listing in Kenya amid bear market

AFRICAN STOCKS AND FINANCEDecember 22, 2023 at 12:02 AM UTC

The Nairobi Securities Exchange (NSE) is currently experiencing a prolonged bear run, leading three companies, including Credit Bank, to suspend their plans to list on the bourse due to concerns about the potential adverse pricing of their shares.

The persistent bearish trend on the NSE has affected the majority of listed stocks, including those of prominent companies like Safaricom, KCB Group, and East African Breweries Plc (EABL). Various factors, such as a flight of foreign investors, have contributed to the significant decline in stock prices.

In general, companies typically prefer to go public during a bull market when they can offer shares at a premium valuation, allowing for stable or rising paper wealth for their shareholders post-listing. According to the Capital Markets Authority (CMA) two other unnamed companies in the food processing and mining sectors, have also decided to halt its planned listing due to the current market conditions.

Key Takeaways

The NSE was recently ranked as the worst-performing African stock exchange in terms of dollar returns for the first nine months of the year. This ranking highlights the significant impact of foreign exits and global shocks on East Africa's largest stock market. This assessment is based on the Morgan Stanley Capital International (MSCI) Index, a crucial source of investment information for foreign investors. Additionally, Bloomberg conducted a similar analysis, which found that the NSE was among the worst-performing stock markets globally, primarily due to the decline of the NSE All Share Index. The MSCI Index tracks three Kenyan blue-chip stocks, including Safaricom, Equity Group, and EABL, which are exposed to foreign investors who have traditionally played a substantial role in trading on these counters.

Nairobi Securities Exchange

Credit Bank

Safaricom

KCB Group

East African Breweries Plc

IPO

Capital Markets

Finance