NSE wants State to reduce stake in listed firms

Treasury building. FILE PHOTO | NMG

By ELIZABETH KIVUVA
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Summary

• The NSE is pushing for a scale-down of government ownership in listed companies and increase additional shareholding in the next six months.
• NSE chairman Kiprono Kittony has said the proposal made to the National Treasury will target companies such as Safaricom, KCB Group and Kenya Re-Insurance which have room for additional re-issuance of shares.

The Nairobi Securities Exchange (NSE) wants the government to cut its stake in key listed companies to as low as 10 percent in its latest bid to bring in new investors on the bourse amid lack of major listing in the last five years.

The NSE is pushing for a scale-down of government ownership in listed companies and increase additional shareholding in the next six months.

NSE chairman Kiprono Kittony has said the proposal made to the National Treasury will target companies such as Safaricom

, KCB Group

and Kenya Re-Insurance which have room for additional re-issuance of shares.

Government owns 35 percent stake at Safaricom, Kenya Re (6o percent), KenGen (70 percent) and Kenya power at 50.1 percent.

Capital Marekts Authority (CMA) and NSE were banking on Privatisation Commission to bring new companies to the bourse, but the process has been facing headwinds with key parastatals such as Kenya Pipeline.

The privatisation agency has only managed to conclude a single deal — that is the Kenya Wine Agencies Limited (Kwal) in over a decade. The last successful privatisation by Government was the Safaricom IPO.

The reduction of the ownership is expected to unlock liquidity of the stocks at the NSE and attract investors to the market which is already facing shortage of listings.

‘’There is already a parliamentary committee holding these discussions with the Treasury and Capital Markets Authority looking at possibilities of extra listing,” Mr Kittony said. “There is no issue for the demand side in the market, but we are focused on dealing with the supply side and increasing listings targeting state-owned enterprises. We are not telling the government to lose its control on the companies.”