NSE Chief Executive Geoffrey Odundo. [David Gichuru, Standard] After four years, Homeboyz Entertainment seems to have ended the listing drought at the Nairobi Securities Exchange (NSE), becoming the first entertainment firm to join the bourse.
The listing by way of introduction came through the Growth Enterprise Market Segment (Gems).
Gems was set up in 2013, targeting small firms, but has since attracted only five such entities whose shares have been on a disappointing run and have largely failed to excite the market.
These are Home Afrika, Flame Tree Group, Kurwitu Ventures, Nairobi Business Ventures (NBV) and Atlas Development.
However, Atlas Development, which had also cross-listed on the London Stock Exchange, was struck off from the segment for lack of a nominated advisor and has since been delisted from the NSE. Read More
Missed targets
Gems was expected to list 19 firms by 2017 and 39 by 2023, but it appears local small and medium enterprises (SMEs) have no appetite for the capital markets. Mike Rabar, CEO of Homeboyz Entertainment during the firm’s listing on NSE’s Growth Enterprise Market Segment by introduction. Homeboyz , best known for its urban radio station Homeboyz Radio, listed 63.2 million shares, with its share is priced at Sh4.66.
However, in its debut trading, it offered 50,000 shares, attracting a bid price of Sh1.50, with no shares changing hands at the time.
Kenya has many SMEs in need of funding, but a majority have shunned the capital markets as a source of funding.
Vasu Abotula, the founder of NBV, which listed in the Gems section in 2016, said the country has huge potential to list many SMEs but they need a confidence booster from the capital markets regulators.
“They need to be convinced that when they come to the NSE, they’ll be protected,” he said.Abotula noted that very few SMEs can get bank financing as it is too expensive.“When you want more money, the market will give you. Bank lending is always a trap,” he said.He added that capital market authorities need to do a lot of marketing to build up the confidence of the many eligible SMEs in the country.NSE Chief Executive Geoffery Odundo, however, said the challenges facing the Gems section are not unique to the Kenyan market.“It’s not peculiar to us. The segment world over has had that kind of movement sometimes …. There’s going to be a time when companies have seamless entry and exit, and it’s not going […]
