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The Delisting Trends at Nairobi Securities Exchange

12 May

Here is a list of companies you probably have never heard of! Yet were once listed on Nairobi Stock Exchange.  A number of listed companies have made their exit from the Nairobi Securities Exchange (NSE) citing various reasons over time. Currently the NSE lists 57 companies yet in 1970’s the number was 72. Though there have been some new Listings, many have also gone and this is very normal globally. There is very scanty information on these companies some of which we’ve never heard of in the modern Kenya! No body mentions them!

Delisting means permanent removal of securities of a listed company from a stock exchange. After the delisting, the securities of that company can no longer be traded on that stock exchange. Firms delist for different reasons, while for some their performance fell below the listing requirements, others were bought over leading to their exits. Most firms cites compliance costs and supervisory issues while others voluntarily exit. The collapse of initial EAC block also meant delisting of companies listed in the Nairobi Stock Exchange originating from Uganda and Tanzania.  The Bourse has made progress in attracting new listings, recently through the introduction of Growth Enterprises Market Segments (GEMs) only Home Afrika and I&M bank listed in 2013 through GEMs and Reverse takeover respectively.

Among the most recent exits are:

  • CMC Holdings
  • AccessKenya
  • Rea Vipingo

Unilever Kenya Ltd formally Brooke Bond Liebig Kenya Ltd exited from the bourse in January 2009, after its shareholders passed a special resolution to delist, after Unilever Plc through its subsidiary Brooke Bond Group acquired 11.8 per cent shares held by minority shareholders in the tea company. Other exits which include paper sack and carton maker East African Packaging Ltd, and British trading firm African Lakes Corporation which delisted from the bourse in 2003. African Tours and Hotels Ltd put under receivership in 1998 thereafter rebranding to Kenya Safari Lodges.

Some Of The Earlier Exits Include But Not Limited To:

  • Elliot’s Bakery Ltd.
  • TimSales
  • Kenya Hotels Ltd.
  • Brooke bond Kenya Ltd.
  • East African Packaging Ltd
  • African Lakes Corporation.
  • Consolidated Holdings Ltd.
  • E. A. Bag & Cordage Co.Ltd.
  • E. A. Packaging Industries Ltd.
  • E. A. Road Services Ltd.
  • Motor Mart Group Ltd.
  • Kenya National Mills Ltd.
  • Ol Pajeta Ranching Ltd.
  • Pearl Dry cleaners Ltd.
  • Philips Harrison & Crossifield.
  • Sofar Investment Ltd.
  • Theta Group Ltd.
  • Kenya Finance Corporation.
  • Chancery Investment Ltd.
  • Kenstock Ltd.
  • Kenya Co-operative Cremaries.
  • Kenya Planters Co-operative.
  • E. A. Oxygent Ltd.
  • City Brewery Investments Ltd

A few of the companies rebranded. Credit Finance Corporation was renamed CFC bank in 1995 when it became a bank Whilst Dunlop Kenya Ltd changed its name to Olympia Capital Holdings Ltd. The market has evolved over years shading off old listings while bringing on board more robust modern day companies on board for example Kengen, Kenya Re, Equity bank and Safaricom being just a few of the recent listings.

The question is Why are these companies Delisting? Is the market becoming less attractive as a source of Longterm financing?

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Posted by on May 12, 2014 in Economical, Financial

 

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