The Nairobi Securities Exchange is exploring new ways to attract new listings.
Managing director Geoffrey Odundo said they plan to incubate firms interested in joining the NSE but currently do not qualify.
"“The firms will initially come in as hosted companies but as we go along, we’ll start educating them about the capital markets and how to raise capital with the ultimate intention of having them convert into listings,” he said.
In an interview, Odundo said many firms still fear going public despite the capital markets providing an avenue for raising capital.
The NSE is currently finalising admission requirements into the incubator and accelerator experience targeting firms across the board that are yet to qualify for the Growth Enterprise Market Segment.
“There is a huge pool of firms that have expressed interest in the incubator programme including Tuskys Supermarket,” Odundo said.
This, he said, will help boost new listings as introduction of the GEMS market segment has failed to meet its intended goal.
“We have provided all the incentives for firms to come into the market, developed the GEMS markets segment, tried proactive one-on-one approaches with firms but over the last three years we have not seen the traction pick up,” Odundo said.
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.
Odundo said firms are still wary of regulation and corporate governance requirements dictated by the Capital Markets and NSE adding that it was slowing down uptake.
“Through our own research we found that there’s always an apprehension about being a listed company. We want to kill this by allowing firms to be hosted on the Nairobi bourse,” he said.