CMA eyes government stakes in publicly listed firms
The Capital Markets Authority (CMA) has set its sights on government stakes in publicly listed firms as it seeks to stir market activity in the country.
The move which will be presented as part of proposals to the National Treasury is part of a two pronged strategy which will further see the capital markets regulator push for the privitisation of high quality State owned firms.
The proposal if successful will see the government divest further on its holdings in publicly listed firms.
According to CMA Director of Regulatory Policy and Strategy Luke Ombara, the divestments will serve a crucial source of funding to government while serving to cure market challenges.
“If government can offload another 10 per cent in its holdings in Safaricom, that’s plenty of funding to address issues such as budget deficits and debt repayments,” he said.
“Further divestment by government will serve to address market concentration concerns and increase local investor participation in the equities market.”
The government holds significant stakes in publicly listed companies such as KenGen where it holds a 70 per cent stake.
In Safaricom, the government controls a 35 per cent stake while as in KCB, the government has a 17.5 per cent shareholding.
Additionally, the CMA has disclosed the Kenya Pipeline Corporation (KPC) and the Kenya Ports Authority (KPA) as part of its privatization wish list.
The privatization of government entities is however dictated by the Privatization Commission which was formed to advise and transact processes to reduce the government exposure in State corporations.
The CMA is itching to end a listings drought at the Nairobi Securities Exchange (NSE) which saw its last initial public offer (IPO) in 2014.
HomeBoyz Entertainment Limited could be the party to end the dry spell its founder Myke Rabar indicating plans to list the company by the close on the year on Monday.
The firm is however tipped to likely list on the bourse’s alternative segments including the Growth and Enterprise Market Segment (GEMS)