Latest news with #NairobiSecuritiesExchange
TimesLIVE
2 days ago
- Business
- TimesLIVE
Kenya looks to privatise state assets to draw private-sector investments: Ruto
Kenya is planning to privatise some state assets via initial public offerings in order to bring in more private sector investment, President William Ruto said at the London Stock Exchange on Wednesday. The government plans to start with listing the Kenya Pipeline Company via an IPO on the Nairobi Securities Exchange this year, Ruto said. "We are committed to a structured, time-sensitive programme that identifies and prepares a robust pipeline of key government assets to be privatised through the stock exchange or improved through private sector participation," he said. Ruto also said that well-functioning domestic capital markets could reduce reliance on external debt. Kenya has been seeking new sources of funding since deadly nationwide protests last summer forced it to pursue austerity measures and scrap planned tax hikes worth more than 346-billion Kenyan shillings (R46.77bn).
Business Insider
4 days ago
- Business
- Business Insider
Kenya plans to privatise state assets to cut debt, attract capital
Kenya plans to privatise several state-owned enterprises through initial public offerings (IPOs) in a bid to attract more private sector investment. Kenya intends to privatise state-owned enterprises through IPOs to encourage private sector investment. The Kenya Pipeline Company will be listed on the Nairobi Securities Exchange by year-end. President Ruto emphasized the importance of leveraging learnings from the London Stock Exchange to strengthen domestic capital markets. Kenya plans to privatise several state-owned enterprises through initial public offerings (IPOs) in a bid to attract more private sector investment, President William Ruto said on Wednesday during a speech at the London Stock Exchange. The government will begin the process by listing the Kenya Pipeline Company on the Nairobi Securities Exchange later this year, according to Reuters. 'This will offer investors a unique opportunity to deploy capital in one of our most strategic infrastructure enterprises,' "We are committed to a structured, time-sensitive programme that identifies and prepares a robust pipeline of key government assets to be privatised through the stock exchange or improved through private sector participation," he said. President William Ruto said Kenya will continue to draw lessons from the London Stock Exchange to strengthen and revitalise the Nairobi Securities Exchange (NSE), as part of broader efforts to deepen domestic capital markets and reduce reliance on external debt. In 2023, President Ruto announced plans to privatise 35 state-owned enterprises, with an additional 100 to follow. However, in October, Kenya's High Court struck down the privatisation plans, halting the initiative. Path to financial autonomy The country has been exploring alternative funding sources since widespread protests last year forced the government to abandon proposed tax hikes totalling over 346 billion Kenyan shillings ($2.68 billion) and adopt austerity measures. Speaking separately at the Africa Debate event in London on Wednesday, Ruto cited recent disruptions, including the cancellation of USAID funding by U.S. President Donald Trump, as a catalyst for Kenya's shift toward greater financial self-reliance. ' We are working to rely on our own resources and attract private investment, rather than depending on funding we cannot control, ' he said.
Zawya
16-05-2025
- Business
- Zawya
Kenya eyes $155mln from sale of stake in parastatals
Kenya's National Treasury is looking to raise up to Ksh20 billion ($155 million) from listing of state-owned corporations on the Nairobi Securities Exchange (NSE). It is also considering a further reduction of its shareholding in those firms already listed, with the proceeds expected to offset part of pending bills estimated at Ksh700 billion ($5.42 billion). Treasury Principal Secretary Chris Kiptoo told The EastAfrican on Tuesday that discussions over the target companies are on-going, but the plan has already been agreed on to raise money from the stock market and bolster activity on the bourse.'We are planning to go to the market in the course of the 2025/2026 fiscal year and we have candidates but, at this point, we haven't decided which ones,' Dr Kiptoo said.'We are just saying, why we can't bring vibrancy in the market? You know, it has been a while since we went to the capital markets to list. We could raise some money there and there are many candidates, some existing (listed). We could offload more from the existing ones. We could do new ones (IPOs).'The Nairobi bourse has not registered a single listing from a corporate entity in almost a decade, and the Capital Markets Authority (CMA) is keen on ending the initial public offerings (IPO) drought through a string of reforms, including relaxing rules for companies to list on the Main Investment Market Segment (MIMS) and the newly introduced small and medium-sized (SME) market segment. President William Ruto promised to end the IPO drought on the NSE by listing between five and 10 state-owned corporations during his first year in office, but the plan is yet to materialise.'There are those candidates (state-owned corporations) we have taken to the Cabinet,' the PS said. 'So, these are things we cannot at this point say we will do this or that, but Ksh20 billion is the estimate. We have a number. By June – by the time this budget is completed -- we should have done internal consultations,' Dr Kiptoo added. The chairperson of the Parliamentary Budget and Appropriation Committee Samuel Atandi expressed optimism about the Treasury's revenue projections, including receipts from the offloading of shares in state-owned corporations. Read: Kenya begins $24m asset valuation in run-up to major accounting overhaul'The investment revenues we are projecting to have has two votes: the particular vote of offloading shares in parastatals and the vote on dividends, which we will collect. I'm confident about these revenue projections,' Mr Atandi, the Alego Usonga MP, told The EastAfrican. In April, the Treasury ordered another audit of the government's unpaid bills requiring businesses owed money by the state to go through another layer of scrutiny. Under the plan the Treasury wants the Auditor-General to have oversight over the pending bills, which rose to Ksh706 billion ($5.47 billion) by December 2024, with counties accounting for Ksh182 billion ($1.41 billion) and National government Ksh524 billion ($4.06 billion). Last year, the CMA said rising interest rates made investors shift to high-yielding government bonds from the equities market, leaving companies seeking to raise new capital through the sale of shares to the public holding on for fear of undersubscription. Lucrative yields on government bonds, anti-Finance Bill 2024 protests by the Kenyan youth popularly referred to as Gen-Z in June, and the borrowing options granted by commercial banks further complicated the IPO environment, leaving potential issuers with hard choices to make on their funding plans. Three firms from the financial, food processing and mining sectors suspended plans to list on the bourse in 2023 fearing adverse pricing of their shares as a result of the persistent bear run on the bourse. Companies usually prefer to go public in a bull market, which allows them to sell shares at a premium valuation and enjoy a stable or rising paper wealth for their shareholders once they list. © Copyright 2022 Nation Media Group. All Rights Reserved. Provided by SyndiGate Media Inc. (
Zawya
09-05-2025
- Business
- Zawya
Kenya: Regional conflicts, Trump's tariffs drive foreign investors out of NSE
Kenya's stock market is facing the risk of foreign outflows as a result of the escalating regional conflicts and the potential global trade wars triggered by the US tariffs, highlighting the sensitivity of deep-pocketed foreign investors to insecurity and political noise in frontier and emerging markets. The Capital Markets Authority (CMA) says in its latest quarterly market report (January-March) that insecurity in the Democratic Republic of Congo, South Sudan and Somalia is likely to harm the flow of investment capital to Nairobi. The regulator reckons that the volatile situation on the Nairobi Securities Exchange (NSE) is likely to be exacerbated by the contentious tariffs imposed by the US President Donald Trump as foreign investors sell their stocks in search of secure investment environments that are unlikely to be significantly affected by the proposed policy reforms in Washington DC.'Political instability in the Democratic Republic of Congo, South Sudan and Somalia is likely to have a negative spillover effect on the Kenyan domestic market by posing insecurity threats harming the flow of investment capital into Kenya,' the regulator says. Foreigners accounted for 38.24 percent of total market turnover in the first quarter of this year, down from 43.83 percent in the previous quarter (October-December) 2024, CMA data shows. During Q1 2025, the Nairobi bourse recorded a net foreign outflow of Ksh3.26 billion ($25.27 million) as foreign investors sold their shares in listed companies, compared with Ksh16.63 billion ($128.91 million) in Q4 2024.'The drop is attributed to investors seeking a secure investment environment that is unlikely to be significantly affected by the proposed policy reforms in the US,' CMA explains. The foreign participation in the equity market declined from 43.83 percent in Q4 2024 to 38.24 percent in Q1 2025. In January this year, foreign participation remained relatively strong at 46.22 percent, but dropped sharply to 31.03 percent in March, likely due to tariff pronouncements by President Trump. But the stock market registered a gain of 3.69 percent in the quarter, although it is a significant decline, compared with the 76.62 percent gain recorded in December 2024. According to the CMA, Kenya might experience spillover effects from political instability in neighbouring countries, and the US-China trade war is likely to fuel uncertainty in global trade, potentially leading to a global economic slowdown.'This will potentially spark a stock market rout, dampen investor sentiments leading to a slowdown in capital markets activity,' CMA notes. 'Further, with the short-term trade landscape remaining uncertain, corporations aiming to raise financing via the capital markets will pull back on their initial public offering (IPO) decisions as we head halfway into 2025.'CMA further notes that the persisting geopolitical conflicts and confrontations between Ukraine and Russia are a major concern. In mid-March, investors pulled out of global equity funds on lingering concerns about the impact of President Trump's aggressive trade policies on the global economy. Outflows from sector equity funds eased to a low of $178.7 million as inflows into industrials ($1.02 billion), and gold and precious metals funds ($485 million) partially offset net selling in most sectors. Across East Africa, at least 130,000 people have been displaced in South Sudan since fighting broke out between government troops and opposition forces, including the White Army, which is said to be supporting the opposition leader, First Vice-President Riek Machar. In Congo, fighting between Congolese security forces and militant groups led by M23 escalated in January, resulting in the capture of Goma, the regional hub of eastern DRC near the Rwanda border. In Somalia, terror attacks and clan conflicts are increasing as a result of disputes over land, water, and political power, displacing more than 250,000 people and killing more than 600 between January 2024 and February 2025. These conflicts are expected to persist in 2025, driven by unresolved land disputes, political rivalries, and climate-induced resource scarcity. © Copyright 2022 Nation Media Group. All Rights Reserved. Provided by SyndiGate Media Inc. (
Zawya
05-05-2025
- Business
- Zawya
Kenya: Relief for struggling borrowers as Absa restructures $26mlm loans
Absa Bank Kenya has restructured Ksh3.4 billion ($26.35 million) in loans it gave to customers who are struggling to repay as a result of economic challenges linked to high cost of doing business, state taxes and levies and declining incomes. The bank says in its latest annual report for 2024 that the quality of its loan portfolio was heavily impacted by headwinds coming from the operating environment, which strained the personal household, manufacturing and trade sectors resulting in a surge in the gross non-performing loans (NPLs) ratio to 12.3 percent, from 9.6 percent, compared to the industry average of 16.4 percent. The loan restructuring plan aimed at granting a repayment relief to distressed borrowers was implemented last year, at a time when the lender also approved more than Ksh180 billion ($1.39 billion) in new loans to support the productive sectors of the economy.'Throughout the year, we continued to play a significant role in driving Kenya's economic growth by strategically deploying our capital. We approved more than Ksh180 billion in new loans, further cementing our position as a trusted financial partner to our customers,' the lender says.'At the same time, we stood by those facing difficult moments, offering loan restructures amounting to Ksh3.4 billion ($26.35 million) to help them navigate uncertainty with confidence.'The lender, which is listed on the Nairobi Securities Exchange (NSE), reported an eight percent decline in net loans and advances to close the year at Ksh309 billion ($2.39 billion), blaming the drop in the lending business on reduced customer borrowing appetite as a result of high interest rates and currency appreciation.'This performance is in line with a contracted private sector credit of 1.4 percent in December 2024. Our loan book was flat on a constant currency basis. Our key focus products namely Trade Loans, Mortgages, Overdraft and Virtual lending recorded good traction with respectable year on year growth,' the lender says. Degree of flexibilityIn loan restructuring, borrowers renegotiate and adjust the terms of the loan with the lender to avoid default. It helps to maintain continuity in servicing the debt and gives borrowers a certain degree of flexibility to restore financial stability. Among the concessions in a restructured loan are a new repayment schedule, interest holidays, deferral or extension of principal and /or interest payments and principal (capital) holidays. Read: Banks open to loan restructuring as higher rates, inflation raise defaultsThe lender's impairment recorded a seven percent decline to Ksh7.8 billion ($60.46 million) in 2024 from Ksh8.4 billion ($65.11 million) in 2023, anchored on increased collections and recoveries, but this was offset by increased credit risk in retail and small and medium-sized enterprises (SMEs) 'occasioned by the challenging operating environment for our customers.'Central Bank of Kenya implemented a series of policy rate increase, raising the benchmark lending rate from 8.75 percent in January 2023 to 12.5 percent in December 2023 and then to 13 percent by mid-2024, before embarking on another series of cuts to boost credit to the private sector and stimulate economic growth. At its latest meeting on April 8, 2025, CBK cut its benchmark interest rate to 10 percent, marking the fifth consecutive rate reduction on expectations that inflation would stay below the five percent midpoint of the central bank's target range in the near term, supported by stable core inflation, low energy prices, and exchange rate stability.'2024 noted marked pressure on the Kenyan economy. Firstly, the country being placed on the Financial Action Task Force (FATF) grey list signalled to global financial institutions that the country has deficiencies in combating money laundering and terrorist financing,' the lender says.'This has led to increased scrutiny, higher transaction costs, and heightened foreign investor concerns. Additionally, credit rating downgrades by Fitch, S&P, and Moody's have also placed increased scrutiny on the country's heightened risk of debt default and concerns on its limited fiscal headroom.'Kenya is facing significant challenges due to a high debt burden and increased risk of debt distress, and managing its public debt has become increasingly difficult, as it has grown rapidly in recent years. According to the CBK, total public debt was Ksh10.6 trillion ($82.17 billion) as of June 2024, up from Ksh 10.3 trillion ($79.84 billion) in June 2023, and is projected to reach Ksh13 trillion ($100.77 billion) by 2027. © Copyright 2022 Nation Media Group. All Rights Reserved. Provided by SyndiGate Media Inc. (
