The Africa Capital Markets Watch 2017 report by PwC has shown that the Kenyan capital markets are lagging behind in Africa as far initial public offerings (IPOs) are concerned. The report indicates that no IPOs were raised on the Nairobi Securities Exchange in 2016 and in 2017.
The NSE has only raised Sh4.2 billion through 2 IPOs in 2014 and 2015 that raised Sh700 million and Sh3.5 billion in that order.
“There was no IPO activity in 2017 in Ghana compared to 2016, which saw $102 million raised on the Ghana Stock Exchange. This year, the Nairobi Securities Exchange and Nigeria Stock Exchange both extended their IPO drought, with no new IPO capital raised in either 2016 or 2017,” the report said.
On the other hand, some countries such as Tanzania, Rwanda, and Namibia reported a significant increase in IPO value. The increased activity in these countries is as a result of privatising stakes in state-owned entities and encouraging local firms to list on domestic exchanges. Furthermore, regulations requiring certain companies to list have also contributed to increasing IPO activity.
In the last five years, the most Further Offers (FO) happened in South Africa which stood for 65 percent of the total FO volume and 86 percent of the total FO value. In Kenya, FOs stopped in 2017 thanks to the long election period.
During the 5-year period, Kenya raised Sh31.8 billion from 5 offers. Two offers raised Sh4.6 billion in 2014 while three raised Sh27.2 billion in 2016. In 2016, KenGen’s FO was among the top after raising Sh26.2 billion.