Capital Markets Authority: 5-year listing dry spell to end
Lewis Njoka @LewisNjoka
Capital Markets Authority (CMA) is changing regulations to attract more investors to the Nairobi Securities Exchange (NSE) following a five-year listing dry spell.
As a matter of fact, self-listing of the bourse in 2014 was the last Initial Public Offering (IPO) at the NSE and has not witnessed much activity since the Sh4.3 billion Acorn green bond floated in January.
Speaking during an online forum releasing the Capital Markets Soundness Report (Q2.2020) CMA Chief executive Wycliff Shamiah said the regulator was seeking regulations that would make it easier for Small and Medium Enterprises (SME) and other firms raise money at the local securities market.
“The Authority will fast-track the ongoing overhaul of its public offers, listings and disclosures (POLD), collective investment schemes (CIS) and corporate governance frameworks, to drive capital raising and listings by all types of companies, counties and other potential issues,” said Shamiah.
“It’s true the corporate bonds section hasn’t been very active save for the green bond issued last year.
Firms consider what is most convenient for them at the time. Banks are very liquid now so they go there despite the fact that the capital markets are cheaper,” he added.
CMA director in charge of regulatory policy and strategy, Luke Ombara said the authority hopes to have the new regulations in place by June next year, adding they will be more flexible allowing SMEs to raise cash easily at the bourse.
“Listing and disclosure regulations are being done in two phases since June. Phase one involved a diagnostic analysis of past interventions and how well they worked.
We now have a policy framework that will be shared with the public by September,” said Ombara.
CMA will also regulate private equity funds but encourage their use as a source of cash due to the various advantages they offer companies seeking to raise money.