Four more stockbrokers have received approval from the Nairobi Securities Exchange (NSE) to offer advisory services to SMEs intending to go public, increasing the number of approved firms to eight.
The NSE announced Tuesday that CBA Capital, African Alliance Investment Bank, Kingdom Securities and Faida Investment Bank have joined the list of approved advisors who will help small and medium sized companies (SME’s) list their shares on a special board at the Nairobi bourse.
The four firms join Burbridge Capital, Emerging Africa Capital, NIC Capital and Standard and Mutual Limited which were the first to be registered as nominated advisors (NOMAD).
The eight firms are allowed to assess the eligibility of companies that want to list on the Growth Enterprise Market Segment (GEMS) of the Nairobi bourse and advise them on compliance requirements of the Capital Markets Authority before and during their listing on the new board, which was launched Tuesday.
The GEMS board has less requirements for listing than those used for listing on the main and alternative boards of the NSE.
During the launch of the GEMS board, Eddy Njoroge, chairman of the NSE said that any company that lists on the new board will need to retain a NOMAD to assist it to comply with good corporate governance practices.
“The capital markets came to the realisation that some of the existing listing criteria would act as a barrier to small and medium enterprises looking to raise capital,” said Mr Njoroge, adding that some of the listing requirements include minimum share capital of Sh10 million and at least 100,000 issued shares.
Firms listed on the GEMS board will not be required to have made a profit and they do not need to be incorporated in Kenya.
After three months of listing, at least 15 per cent of the shares must be held by more than 25 per cent of the shareholders who must not include employees of the issuer or family members of the controlling shareholder.
“We believe that GEMS provides an opportunity for firms participating in Kenya’s natural resources and mining sector to raise capital and also comply with the 35 per cent local equity component under Legal Notice No. 118. These firms require huge flows of capital to finance their capital intensive operations,” said Mr Njoroge.
Paul Muthaura, acting chief executive officer, Capital Markets Authority said that the NOMADs will be responsible for overseeing compliance of the company with all their listing and continuing obligations.