| dc.description.abstract | The objective of this study was to determine the factors affecting demutualization of the
Nairobi Securities Exchange. The study adopted a descriptive research design. The target
population comprised of all 25 stakeholders at the NSE. This included: Capital Markets
Authority (CMA), Central Depository Systems (CDS), Stock Brokerage firms, and
mutual companies. Primary data was collected by use of a semi structured questionnaires
with both open and closed ended questions. Data analysis was done using SPSS and
Microsoft Excel to generate quantitative reports which were presented in the form of
tabulations, percentages, mean and standard deviation. Multiple regression analysis
between different variables related to demutualization of the NSE was also conducted.
The study found out that factors that affect demutualization of the NSE include
ownership structure, government policy and regulatory framework and also corporate
governance.
The study recommends that the current owners who include the stockbrokerage firms
should commit to relinquish some of the ownership to the government and to the general
public so that the stock exchange can be listed to trade like any other company. To ensure
successful demutualization, the Government should work in collaboration with other
stakeholders to ensure there is no resistance to the whole process of demutualization. The
study recommends during the whole transition period on demutualization, the stock
exchange should maintain high level of corporate governance to ensure that the interests of both the current mutual owners and investors are not affected. This is because high
levels of corporate governance ensure that market confidence is held high | en |
