Nairobi bourse to classify Gems firms in other sectors from May 19

The NSE will from May 19 classify the four companies under the Growth and Enterprise Market (Gems) segment with other stocks, ending their separate category.

This means the number of sectors in the market will drop to 11 from 12. The NSE will still however retain its four market segments namely Main Investment Market Segment (Mims), the Alternative Investment Market Segment (Aims), Fixed Income Securities Market Segment (Fisms) and Gems.

Atlas Support and Development Services will shift to the commercial and services sector, Kurwitu Ventures and Home Afrika to the investments sector while Flame Tree Group Holdings moves to manufacturing.

The Gems segment was launched in January 2013, with Home Afrika becoming its first listing in July 2013. The other three listed in the last quarter of last year.

The NSE said the reclassification conforms to international best practice and will enable domestic and international investors to compare listed companies across industry sectors.

“It also assures investors that companies listed on Gems are subject to the same level of disclosure applied to companies listed on the Mims and Aims,” said NSE chief executive officer Geoffrey Odundo in a statement.

“The exchange believes this will enhance the profile of the companies listed on Gems. An enhanced profile will assist the business aspirations of Gems companies marketing their products and services to potential clients.”

Old Mutual Securities analyst Eric Munywoki said while the reclassification will not change much in terms of the company performance because all listing requirements remain unchanged, it will make it easier to gauge performance against peers.

“For comparison purposes this would play well. They can now be compared based on industry ratios,” said Mr Munywoki.