The Capital Markets Authority is courting dozens of small and medium enterprises which have potential to list at the Nairobi Securities Exchange, the regulator has said.
This is in line with the objectives of a 10-year Capital Market Master Plan that it started implementing in 2014.
Under the strategy, the CMA targets about three to four new listings every year on the Growth Enterprise Market Segment of the NSE.
Since January 20, CMA has been engaging firms that have huge growth potential to sign up for a business training and advisory session that is scheduled between March 30-31.
CMA chief executive Paul Muthaura yesterday said they have signed up 70 potential firms.
“The response from potential issuers is a clear demonstration of the level of interest in the capital markets as a source of long term funding to support growth and business expansion plans for companies in Kenya and beyond,” he said, referring to the upcoming Business Incubator and Accelerator on the Listing Experience event.
The NSE launched the GEMS market in January 2013 in order to allow small and medium sized firms to raise capital, while benefiting from increased profile and liquidity within a regulated environment.
GEMS is self-regulated by the NSE and has lower entry requirements compared to the Main Income Market Segment and the Alternative Investment Market Segment.
A company wishing to list is required to have Sh10 million in paid up capital compared with MIMS’s Sh100 million and AIMS’s Sh20 million.
CMA’s target is to have approximately 40 companies on the GEMS by 2023.
However, the segment has attracted a few firms, with only four listed so far. They include Flame Tree Group, Kurwitu Ventures, Atlas Development & Support Services and Home Afrika.
Muthaura said they have engaged consultants who will guide SMEs on identifying business needs, strategy issues, developing business plans and considerations for the appointment of advisers and other agents.
“Interested firms will have an opportunity to participate in structured engagement with the CMA, NSE, nominated advisors, transaction advisors, lawyers, auditors, stockbrokers and investment banks, to allow for confidential discussions on their readiness for listing,” he said. Muthaura said the authority is collaborating with capital markets regulators in the region to support the establishment of a Capital Markets Advisory Centre to enhance SME access to capital.
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