NSE listing fees drop to 6-year low as firms exit

Nairobi Securities Exchange CEO Geoffrey Odundo. PHOTO | SALATON NJAU | NMG 

By PATRICK ALUSHULA
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Summary

• The best year was 2016 when NSE earned Sh85.12 million.
• Delistings and fall in the value of shares of listed firms contribute to a drop in annual listing fees paid.
• NSE’s 2015-19 strategic plan was targeting 88 equity listing by the end of last year, but it did not achieve this.

The Nairobi Securities Exchange (NSE) Limited revenue from annual listing fees has dipped to a six-year low, highlighting the impact of delistings and suspensions at the bourse.

NSE’s latest report shows the annual listing fee in the year ended December dropped by 6.82 per cent to Sh76.06 million compared to Sh81.62 million earned in the previous year.

Last year’s earnings marked the third straight year of dropping revenue from the annual listing fees even as the NSE struggled to attract new listings on the bourse. The best year was 2016 when NSE earned Sh85.12 million.

Annual listing fees refer to the amount of money that all listed firms pay the NSE every year for being on the bourse.

The fee last year formed the second-largest revenue stream for NSE after the transaction levy (Sh414.8 million). This was followed by revenue from broker back office subscriptions (Sh26 million), data vending (Sh23.3 million) and market access fee (Sh16.8 million).

“Annual listing fee is computed on the basis of the daily weighted average capitalisation value of the listed securities for the 11 months between January 1 and November 30,” said the NSE.

The annual fees charged on the NSE Main Investment Market Segment is 0.06 per cent of the market capitalisation subject to a minimum of Sh200,000 and maximum of Sh1.5 million.

This means that delistings and fall in the value of shares of listed firms contribute to a drop in annual listing fees paid.

NSE’s 2015-19 strategic plan was targeting 88 equity listing by the end of last year, but it did not achieve this.

Last year saw KenolKobil delisted after a buyout by French major Rubis Energie while KCB Group

acquired National Bank of Kenya. Other exits from the bourse since 2008 include Unilever, Access Kenya, Rea Vipingo, Marshalls East Africa, Hutchings Biemer, A Baumanns and Atlas East Africa.

NSE looks set to suffer another setback given that TransCentury

board has planned a meeting with shareholders to vote for its delisting as it eyes private equity funding.

Kenya Airways is also on course to exit the bourse and fully revert into government hands. The NSE suspended the share as the nationalisation process enters a crucial stage.

Deacons, ARM Cement and Mumias Sugar sunk into receivership back-to-back in the wake of mounting debts, leading to a lengthy suspension from the NSE.