Capital Markets

Why NSE-listed firms are snubbing ‘bonus shares’


Nairobi Securities Exchange (NSE) CEO Geoffrey Odundo. FILE PHOTO | LUCY WANJIRU | NMG

Firms listed on the Nairobi Securities Exchange (NSE) last year avoided bonus share schemes to shareholders as the value of investor wealth on the bourse dropped by 27.54 percent or Sh547.06 billion.

A bonus issue, usually funded through profits or existing share reserves, is an offer of free additional shares to existing shareholders mainly to encourage more retail investor participation in their stock by lowering the price per share and adding liquidity.

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