Kenyan authorities should develop a more predictable investment environment to encourage dual listings of British firms on the Nairobi Securities Exchange for equity and debt financing, a top UK government official has said.
James Duddridge, British minister for Africa, said there’s growing interest in Kenya’s publicly-traded firms by investors on London bourse, but they could be delaying their decisions because of the unpredictable operating environment.
“There’s a big interest in Kenyan stock exchange. There’s a pipeline which the London Stock Exchange describe as ELITE, some of which would want to be in Kenya,” Mr Duddridge told the Business Daily.
“They target stocks, which have already received investments, but need to receive more foreign direct investments in terms of debt and equity for listing.”
ELITE, the London Stock Exchange Group’s (LSEG) business support and capital-raising programme, in April 2017 signed a memorandum (MoU) of understanding with the NSE and UK government-funded FSD Africa to explore a launch in Nairobi.
A month later, Kenya’s Energy ministry inked an MoU with LSEG to dual-list the now struggling National Oil Company (Nock) in both Nairobi and London to develop a direct connection between the two financial markets.
The planned sale of a stake in State-owned oil firm Nock, which has since stalled in the wake of a plunge in oil markets, was to raise $1 billion (Sh110 billion).
Mr Duddridge has backed dual-listing as a magnet for long-term capital and a major driver for foreign direct investments into Kenya, tipping Nairobi head of most emerging bourses in Africa because of same “accounting processes, language and legal courts”.
“If I was not the minister for Africa and want to set up a business, Kenya should the most attractive place to set a business regionally. But you need to make it as easy as possible to come and live here, spend money here and invest here,” he said.
“And part of that is having a predictable business environment, especially taxation which has occasionally been a problem for the big corporates.”