Home Business Depressed Activity at NSE as Rally Ends

Depressed Activity at NSE as Rally Ends

by kenya-tribune

Capital Markets Authority is working on a plan that will see more firms, especially those in the small and medium-sized sector, list on the Nairobi bourse.

A depressed economy has seen the NSE 20 share index- a price weighted mean of the top 20 best performing counters, slide over the past five years from a high of 5496 points back in 2015 to 2600.41 when the markets closed on Friday last week.

This trend has wiped out the paper wealth of many retail and institutional investors at the bourse.

The bourse closed the week with 70 million shares at KSh 2.5
billion against 91.6 million shares traded for KSh 2.8 billion the previous

Safaricom, which has been dominant and one of the most active counters, outside banks, had its share price plunge 2.7 percent from KSh 31.30 to KSh 30.45.

At the end of last week, the Manufacturing & Allied Sector had shares worth KSh.263Million transacted which represented 10.5 percent of the week’s traded value.

E.A Breweries remained steady at KSh214.25 moving 1.2Million shares valued at KSh258Million. As one of the performance drivers of the NSE 20 Share index, EABL was trading at more than KSh 300 some five years ago.

For close to three years, the NSE has struggled to find new listings. Experts blame this scenario on high costs associated with listing at the bourse.

At present, the NSE has elaborate listing rules that one
must fulfil before being listed. Part I sets out the constitution and mandate
of the Committee with respect to admission to listing, suspension and
de-listing of securities under the general direction of the Board.

There are rules on procedures for admission to listing,
suspension and de-listing of securities. Outlines are also set for Transaction
Advisors, methods of listing securities on the exchange, the market segments
and eligibility and disclosure requirements for listing of securities.

NSE also outlines listing obligations which an issuer is required to observe.

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