There is a corelation between Kenyans’ poor saving culture and the the lack of growth of the NSE, a study by he Capital Markets Authority.
A study on the low uptake of capital markets products showed Kenyans had a better saving profile in the 80s and 90s.
This, the report, said, led to more companies joining the NSE unlike now when when an increasing number of firms are delisting.
Firms that have opted out of the NSE in the last five years include Access Kenya, CMC Holdings, Rea Vipingo, Baumann Limited, Hutchings Biemer and Express Kenya.
Listed miller Unga Group Plc is expected is expected to be delisted from the NSE after US firm Seaboard bought out minority shareholders last month.
According to the study, Kenya’s Gross Savings Rate has dropped by almost a half in 10 years from 11.7 per cent in 2007 to 6.2 per cent, meaning that most Kenyans are living from hand to mouth.
CMA is working with the Treasury to list state-owned enterprises and provide Kenyans with multiple investment options.
DRIVING GROWTH
Data shows new listings have been catalysed by a well-performing secondary market, a rise in general economic growth and a rising GDP coupled with government policy announcements.
CMA and the National Treasury are planning to reintroduce and reenergise a structured, feasible and time-bound privatisation programme through the Nairobi Securities Exchange.
This will target few eligible large state-owned enterprises in key sectors to generate excitement in the market, provide new impetus and guide on perfect timing for capital raising and listing by equally large private firms.
This will be done through the engagement of the State Corporation Advisory Committee.
They will look at options state organisations have in raising funds through the capital markets vis-a-vis the laws governing them.
“The capital markets are determined to play a key role in driving this growth target by mobilising savings through facilitating new capital markets products and services,” the report said.
It calls for the stimulation of the Gross National Savings as a ration of GDP to 30 per cent by the year 2030.
CMA and the NSE have struggled to attract companies to list on the bourse, falling short of achieving an annual target of three to four small medium enterprises on the Growth Enterprise Market Segment.