FINANCE: Local firms urged to dual-list in London - Daily Nation

Local firms urged to dual-list in London and tap global funds for growth

Tuesday April 21 2015

Capital Markets Authority acting CEO Paul Muthaura during a media briefing at the Serena Hotel on September 2, 2014. PHOTO | DIANA NGILA

Capital Markets Authority acting CEO Paul Muthaura during a media briefing at the Serena Hotel on September 2, 2014. PHOTO | DIANA NGILA 

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The London Stock Exchange wants Kenyan companies to consider cross-listing at the bourse in order to raise their profile internationally.

Cross-listing would also see them access more equity capital to finance their cross-border expansion.

In a meeting with key players in Kenya’s capital markets on Friday last week, the London Stock Exchange (LSE) indicated that a dual-listing of Kenyan firms in London and Nairobi would allow local companies tap into global equity capital to finance their growth.

The co-head for emerging markets, equity primary markets at the LSE, Mr Ibukun Adebayo, noted that dual-listing would enable Kenyan firms to attract the world’s largest investors and gain international visibility.

“London Stock Exchange has long been a partner to Africa-focused companies in their quest for growth. Since 2008, these companies have raised in excess of $12 billion (Sh111 billion) in new and further equity capital across alternative investment market and the main market,” Mr Adebayo noted.


“One hundred and twenty companies having major operations and assets in Africa are on London Stock Exchange markets, of which three operate in Kenya.”

 Last year, Atlas Development, a petroleum industry service provider, made a dual-listing both on the LSE and the Nairobi Securities Exchange (NSE). Standard Chartered and Barclays Bank are also listed on both bourses.

Firms in financial services as well as  mining and retail sectors are among potential candidates for dual-listing. About 120 out of over 600 international firms listed on the LSE are African or Africa-focused and their combined market capitalisation is £265 billion (Sh36.8 trillion).

According to Capital Markets Authority (CMA) acting chief executive officer, Mr Paul Muthaura, dual-listing gives an opportunity for deepening domestic and regional markets and enhancing liquidity.

“Dual-listing creates an undoubted opportunity through which investors can seamlessly invest their funds across our borders, facilitate the diversification of portfolios, broaden the capital base available to issuers, and unlock the age-old conundrum of liquidity,” said Mr Muthaura.

The plans to get local firms to list both on the NSE and the LSE also form part of the bigger strategy of transforming Nairobi into an international financial centre that serves not only the East and Central Africa region but also other players in the global market.

“Dual-listing enables the NSE to ensure that companies with substantial operations in East and Central Africa are accessible to both East African and international investors,” said NSE’s chief executive officer, Mr Geoffrey Odundo.

The forum was organised by the LSE and was attended by the CMA, NSE, Stephenson Harwood and Horizon Africa Capital.