The bourse’s prolonged listing drought persists going into the New Year, denying market players added investment options at a time when returns in the economy are shrinking.
The number of listed firms only rose by one last year, the sole new entrant being the Bank of Kigali through a cross listing from the Rwandese exchange in December, while ARM Cement #ticker:ARM and Deacons EA #ticker:DCON joined Atlas Industries #ticker:ADSS on the list of suspended stocks at the bourse.
Although the number of listed firms has increased from 55 to 65 in the past decade—with a high of 67 in 2017— the envisaged growth led by the Growth Enterprise Market Segment (Gems) has failed to materialise.
The market has been without an Initial Public Offer (IPO) since October 2015, when the Stanlib Fahari I-Reit hit the market, while there have only been five listings by introduction since 2014.
The bourse is also facing up to increased prospects of delistings, with firms that are the subject of takeovers going this route.
Two firms—Unga Ltd #ticker:UNGA and Express Kenya #ticker:XPRS — failed in their quest to delist from the bourse in 2018 after takeover bids by key shareholders flopped.
Oil marketer KenolKobil is, however, likely to exit the market in the first half of this year should the buyout bid by French firm Rubi Energie go through as expected.
Attention now turns to the new incubation and acceleration programme called Ibuka –Swahili for emerging –through which the Nairobi Securities Exchange (NSE) is hoping to mentor firms into joining the bourse.
“This programme will enable companies unlock their growth potential through a well-structured incubation programme that places a special focus on enhancing the select companies’ business structure, visibility and ability to attract investment among local and international investors,” said NSE chief executive Geoffrey Odundo when launching the platform on December 17.
He added that at least 13 largely family-owned firms are seeking to sell shares to the public, with some now set to participate in the new programme to prepare for the move. Selected companies are expected to be mentored for 10 months on how to enhance visibility to local and international investors.
They will also gain access to financial advisers and consultants, and guided on how to improve their business structure as they prepare to go public.
World Bank pushes G-20 to extend debt relief to 2021
World Bank Group President David Malpass has urged the Group of 20 rich countries to extend the time frame of the Debt Service Suspension Initiative(DSSI) through the end of 2021, calling it one of the key factors in strengthening global recovery.
“I urge you to extend the time frame of the DSSI through the end of 2021 and commit to giving the initiative as broad a scope as possible,” said Malpass.
He made these remarks at last week’s virtual G20 Finance Ministers and Central Bank Governors Meeting.
The World Bank Chief said the COVID-19 pandemic has triggered the deepest global recession in decades and what may turn out to be one of the most unequal in terms of impact.
People in developing countries are particularly hard hit by capital outflows, declines in remittances, the collapse of informal labor markets, and social safety nets that are much less robust than in the advanced economies.
For the poorest countries, poverty is rising rapidly, median incomes are falling and growth is deeply negative.
Debt burdens, already unsustainable for many countries, are rising to crisis levels.
“The situation in developing countries is increasingly desperate. Time is short. We need to take action quickly on debt suspension, debt reduction, debt resolution mechanisms and debt transparency,” said Malpass.
Kenya’s Central Bank Drafts New Laws to Regulate Non-Bank Digital Loans
The Central Bank of Kenya (CBK) will regulate interest rates charged on mobile loans by digital lending platforms if amendments on the Central bank of Kenya Act pass to law. The amendments will require digital lenders to seek approval from CBK before launching new products or changing interest rates on loans among other charges, just like commercial banks.
“The principal objective of this bill is to amend the Central bank of Kenya Act to regulate the conduct of providers of digital financial products and services,” reads a notice on the bill. “CBK will have an obligation of ensuring that there is fair and non-discriminatory marketplace access to credit.”
According to Business Daily, the legislation will also enable the Central Bank to monitor non-performing loans, capping the limit at not twice the amount of the defaulted loan while protecting consumers from predatory lending by digital loan platforms.
Tighter Reins on Platforms for Mobile Loans
The legislation will boost efforts to protect customers, building upon a previous gazette notice that blocked lenders from blacklisting non-performing loans below Ksh 1000. The CBK also withdrew submissions of unregulated mobile loan platforms into Credit Reference Bureau. The withdrawal came after complaints of misuse over data in the Credit Information Sharing (CIS) System available for lenders.
Last year, Kenya had over 49 platforms providing mobile loans, taking advantage of regulation gaps to charge obscene rates as high as 150% a year. While most platforms allow borrowers to prepay within a month, creditors still pay the full amount plus interest.
Amendments in the CBK Act will help shield consumers from high-interest rates as well as offer transparency on terms of digital loans.
Scope Markets Kenya customers to have instant access to global financial markets
NAIROBI, Kenya, Jul 20 – Clients trading through the Scope Markets Kenya trading platform will get instant access to global financial markets and wider investment options.
This follows the launch of a new Scope Markets app, available on both the Google PlayStore and IOS Apple Store.
The Scope Markets app offers clients over 500 investment opportunities across global financial markets.
The Scope Markets app has a brand new user interface that is very user friendly, following feedback from customers.
The application offers real-time quotes; newsfeeds; research facilities, and a chat feature which enables a customer to make direct contact with the Customer Service Team during trading days (Monday to Friday).
The platform also offers an enhanced client interface including catering for those who trade at night.
The client will get instant access to several asset classes in the global financial markets including; Single Stocks CFDs (US, UK, EU) such as Facebook, Amazon, Apple, Netflix and Google, BP, Carrefour; Indices (Nasdaq, FTSE UK), Metals (Gold, Silver); Currencies (60+ Pairs), Commodities (Oil, Natural Gas).
The launch is part of Scope Markets Kenya strategy of enriching the customer experience while offering clients access to global trading opportunities.
Scope Markets Kenya CEO, Kevin Ng’ang’a observed, “the Sope Markets app is very easy to use especially when executing trades. Customers are at the heart of everything we do. We designed the Scope Markets app with the customer experience in mind as we seek to respond to feedback from our customers.”
He added that enhancing the client experience builds upon the robust trading platform, Meta Trader 5, unveiled in 2019, enabling Scope Markets Kenya to broaden the asset classes available on the trading platform.