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Shares register firm extends its reach
Stockbrokers at work at the Nairobi Stock Exchange. A company that provides shareholder registers services is expanding its operations to the region. Photo/ANTHONY KAMAU
Stock market services firm Custody and Registrar (C&R) has announced intentions to set up operations in Tanzania and Uganda, in an expansion drive expected to shore up its revenues.
The firm, which offers shareholder register updating services and handles transfer of shares and dividend inquiries to 18 listed companies in Kenya said that it is opening two regional offices which are expected to be operational by the second half of this year.
“We’re at an advanced stage of opening regional markets in Uganda and Tanzania,” said CSR general manager Kerry-Ann Makatiani.
C&R marketing manager Beverlyne Wangari said that depending on the success of the two new branches, Rwanda could be next on the company’s regional expansion plans.
Going regional will give C&R access to 11 listed companies on the Uganda Securities Exchange (USE), 16 firms on the Dar-es-Salaam Stock Exchange and 3 corporations on the Rwandan stock exchange.
C&R makes its money by maintaining share registry services and company secretarial services for listed companies and business process outsourcing firms.
Hemming in new clients will increase the firm’s revenues and, with more listings and rights issues expected to take place in 2011, there is a bigger incentive for the firm to go regional.
TransCentury, British American Group and Bank de Kigali are all expected to list by the end of the year. Tanzanian airline Precision Air is also expected to list on the Dar es Salaam Stock Exchange next month.
C&R is also eyeing diversification into offering central depository services.
Immobilisation of share certificates is currently done at the Central Depository and Settlement Corporation (CDSC).
Ms Wangari said offering depository services would make it easier for clients who want to immobilise shares for trading in automated stock exchanges.
The Capital Markets Authority, through the proposed law - Central Depositories (Amendment) Bill 2011 will open the door for companies to offer depository services if passed.
Companies will however be required to increase their capital and change their management structures before they can be licensed as central depository firms.
For companies that will be licensed, they will benefit from access to the commissions charged on transactions on bonds and shares traded on the stock exchange.
CDSC earns 0.06 per cent for shares traded and 0.02 per cent for bonds.
C&R also plans to revamp its shareholder management solution unit by facilitating electronic annual general meetings which would save costs especially for firms that that are cross-listed on the various exchanges. Infrastructure however poses a challenge.
