Nairobi May 24, 2013……Since its launch in January 2013 by the Nairobi
Securities Exchange, the new investment segment has elicited optimism
among growing companies who have always struggled to find avenues for
raising capital to finance their growth and expansion plans.
The segment dubbed GEMS (Growth Enterprise Market Segment) will enable
companies to raise substantial capital to drive their growth plans,
while benefiting from increased profile and liquidity within a
regulatory environment designed specifically to meet their needs. The
GEMS counter will cater for all companies and investors looking to
expand their businesses.
Over the years, a variety of firms including some of the largest and
most successful companies in East Africa have raised capital through
the issuance of equity and debt and listed on these market segments.
“GEMS will enable wealth creators provide avenues for other companies
to create capital for growth. Kenya is going through a major economic
transformation that will see increased investments into sectors of the
economy such as mining, oil and gas, infrastructure and ICT. We are
therefore urging investors (both local, regional and international) to
list on the GEMS counter and offer an opportunity to Kenyans to invest
with them” said Mr. Mugo Kibati, Director General Vision 2030 delivery
secretariat during the recent GEMS media forum held at the Hilton
hotel in Nairobi.
Mr. Kibati reiterated that GEMS is an ideal tool for growth and
development and will stimulate the country’s economic growth to the
10% mark envisioned by 2016. “This is the bastion, the guardian, of
universal suffrage in the economy. The net impact of this Segment on
the Trading Volumes at NSE will definitely be a positive one”, Mr.
Kibati said.
The main segment of the market requires a company to have net assets
of at least Ksh100million, minimum share capital of Ksh50million held
by at least 1,000 shareholders and a track record of three years of
profit in the past five years. These punitive requirements have
always locked out businesses from raising the much needed capital
through the NSE, but with the introduction of the GEMS segment, savvy
investors will be picking on prospective companies at a bargain.
Unlike listing of stocks on other segments, namely Main Investment
Market Segment (MIMS and Alternative Investment Market Segment (AIMS),
GEMS sets the entry barriers for listing of companies much lower.
Aspiring companies keen to raise their profile and capital need to
show accounts for a single year, for which they need not be profitable
but need only to show evidence that they have enough working capital
for a year. Other conditions demand them to show evidence that they
can list as little as 15 per cent of their company, and have as few as
25 shareholders, even three months after listing.
During the forum, Mr. Amish Gupta, a lead transaction advisor
announced that all processes and systems were now complete and the
GEMS counter was ready for take-off. “We have completed the selection
and registration of NOMADS (Nominated Advisors) who will oversee
processes on companies listing on the GEMS counter. The approvals took
more time due to amount of documentation that was needed for approval
that took about 60 – 120 days. This also included annual accounts that
are usually finalized around April/ May”.
Currently the Nairobi Securities Exchange is the home to 61 companies
(51 in the MIMS and 10 in AIMS and 70 bond issues (61 government and 9
corporate).
The NSE initiated the Growth Enterprise Market Segment (GEMS) market
segment in early January 2013. This was developed in partnership with
the Capital Markets Authority (CMA) and the Central Depository and
Settlement Corporation (CDSC).