[Kenya] Capital Markets Authority targets listing 40 companies in the Growth Enterprise Market Segment by 2023
In its drive to increase listings on the Nairobi Securities Exchange (NSE), in line with the objectives of the 10-year Capital Market Master Plan (2014-2023), the Capital Markets Authority (CMA) has signed up 70 potential issuers for the Business Incubator and Accelerator on the Listing Experience event. The event is scheduled on 30-31 March 2017.
The CMA Chief Executive, Mr. Paul Muthaura said this is aligned to the Capital Markets Master Plan target to increase listings on the Growth Enterprise Market Segment (GEMS) of NSE by 3-4 companies annually. This translates to approximately 40 companies by 2023, creating a solid supply of future Main Board listed companies.
Mr Muthaura observed, “The response from potential issuers is a clear demonstration of the level of interest in the capital markets as a source of long term funding to support growth and business expansion plans for companies in Kenya and beyond’’
Mr. Muthaura said, “The incubator and accelerator experience is intended to give interested companies a realistic and practical feel of the listing process. Interested firms will have an opportunity to participate in a stage by stage, one on one, structured engagement with the CMA, NSE, Nominated Advisors (NOMADS), Transaction advisors, Lawyers, Auditors, Stockbrokers and Investment Banks, among other service providers, to allow for confidential B2B discussions on their readiness for listing’’.
Mr. Muthaura explained that the areas of engagement on the listing process will include: identifying business needs/strategy issues, developing business plans, considerations for the appointment advisors & other agents, mandating negotiation, required documentation, regulatory and other approvals, the process of issue placement and allotment, and fees and timelines.
Mr. Muthaura added, “In addition to the Business Accelerator and Incubator on the Listing Experience, the Authority is collaborating with capital markets regulators in the region under the East African Securities Regulatory Authorities (EASRA), which recently approved a proposal to support the establishment of a Capital Markets Advisory Centre (CMAC) to enhance SME access to capital. When established, the institution’s support is expected to focus on prelisting, listing and post listing support services”.
The CMA Chief Executive reiterated that the Authority will also work with business incubators to accelerate the growth and success of entrepreneurial companies through an array of business support resources and services to engage with firms that are not ready to list but have promising prospects that could be nurtured through incubation. This is geared to develop a pipeline of successful businesses to be listed in the future.
The Capital Markets Authority (CMA) was set up in 1989 as a statutory agency under the Capital Markets Act Cap 485A. It is charged with the prime responsibility of both regulating and developing an orderly, fair and efficient capital markets in Kenya with the view to promoting market integrity and investor confidence.
The regulatory functions of the Authority as provided by the Act and the regulations include; Licensing and supervising all the capital market intermediaries; Ensuring compliance with the legal and regulatory framework by all market participants; Regulating public offers of securities, such as equities and bonds & the issuance of other capital market products such as collective investment schemes; Promoting market development through research on new products and services; Reviewing the legal framework to respond to market dynamics; Promoting investor education and public awareness; and Protecting investors’ interest.