Capital Markets

President Ruto pledges to end six-year IPO drought with 10 listings

ruto panel

President William Ruto at a panel discussion during the launch of the Nairobi Securities Exchange (NSE) Marketplace on October 11, 2022. PHOTO | DIANA NGILA | NMG

The government has promised to privatise ten companies in the next year through the stock market to end the six-year listing drought at the Nairobi bourse.

President William Ruto said the government plans to bring six to ten companies to the market through initial public offerings (IPOs), urging the private sector to also list at least five firms at the Nairobi Securities Exchange (NSE).

The government has previously earmarked 26 companies for privatisation, including the lucrative Kenya Ports Authority and Kenya Pipeline alongside loss-making lenders, collapsed sugar millers and state hotels that have been run down over the years.

Read: NSE wants agency to speed up listing of State companies

The President hopes that the listing of government parastatals will boost the NSE, which has not had an IPO since October 2015, when the Stanlib Fahari REIT was listed.  The last successful privatisation by the government was the Safaricom initial public offering in 2008.

“As we prepare between six and ten companies for listing, in the stocks exchange in the next twelve months, and I promise you we will deliver on that commitment, I also want to encourage the private sector as we bring ten companies please bring five,” President Ruto said during the launch of the NSE Marketplace.

Kenya’s capital markets have lagged behind African peers in IPOs and other secondary listings in the last six years.

According to the 2017 Africa Capital Markets Watch by PricewaterhouseCoopers (PwC), the NSE has only been able to raise Sh4.2 billion ($42 million) through two IPOs offered in 2014 and 2015, raising Sh700 million and Sh3.5 billion, respectively.

Read: Kenya ranked lowest in Africa stock listings

Currently, the bourse has 63 listed stocks with a total market capitalisation of Sh1.9 trillion, of which Safaricom controls 50 percent market share.

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