Nairobi Securities Exchange (NSE). PHOTO | DIANA NGILA | NMG A raft of factors including government’s slowed approval process, frequent suspension of the programme and currently stalled operations at the Privatisation Commission have colluded to stifle attempts to put up parastatals for auction.
The Kenyan securities market has been left in the hands of foreign investors.
Five firms (Safaricom, Equity Bank, East African Breweries Ltd, KCB Bank and Co-operative Bank of Kenya), control over 75 per cent of the market in terms of market capitalisation.
Kenya’s plan to sell off inefficient and loss-making state-owned corporations has stalled, spelling doom to the Nairobi Securities Exchange (NSE) which had put hopes of increasing the number of listed companies on its dormant stock market on the government’s divestiture programme.
A raft of factors including government’s slowed approval process, frequent suspension of the programme and currently stalled operations at the Privatisation Commission have colluded to stifle attempts to put up parastatals for auction.
A few large players
The Kenyan securities market has been left in the hands of foreign investors and five firms (Safaricom, Equity Bank, East African Breweries Ltd, KCB Bank and Co-operative Bank of Kenya), controlling over 75 per cent of the market in terms of market capitalisation.
“To reduce exposure risk by high market concentration by the top five companies at the bourse, a key initiative would be for the Commission and policyholders to partner in promoting privatisation and divestiture of government stake in some companies,” says the Capital Markets Authority.
“A more enabling legal framework is necessary and this could be achieved through flexibility that would shorten the approval levels and time,” the agency said through its five year-Strategic Plan (2016-2021) report.
Operations at the Privatisation Agency which oversees the sale of all state assets, including mergers, stalled more than a year ago after the board’s term expired in June 2019. As a result the board has failed to sit for 14 months after the term of seven private sector members expired without replacement.
Vacant positions “We have not had a board since last year. Its term expired in June last year. When I came in January 2019. I only sat on a few board meetings then it expired,” Paul Otuoma, the Privatisation Commission’s chairman told The EastAfrican.However, in May the National Treasury invited members of the public interested in filling up the vacant positions at the Commission to submit their applications latest […]
