| dc.description.abstract | This study investigates the structure of ownership of companies quoted in the stock
exchange and further examines whether ownership structure has significant effects on the
performance of publicly listed companies in Kenya. The population of the study included
all companies listed in the Main Investment Market Segment (MIMS) of the Nairobi
Stock Exchange.
The findings of the study suggest that a typical listed company in Kenya has a mixed
ownership structure with the legal persons (Institutions) and foreign investors as the two
predominant groups of shareholders, each controlling 41% and 34% ownership
respectively. The state with 8% and domestic individuals with 17% hold minority shares
in most local listed companies.
The results presented also show that on the one hand, there are no relationships between
state, Institution and Individual ownership and performance. On the other hand, there is a
significant effect of foreign ownership on performance of listed companies. The
performance of firms dominated by foreign investors seem to be higher than those
dominated by any other group of investors. This means that the Kenyan Capital Markets
seem to recognize the role of foreign investors.
It is recommended therefore that more foreign participation in the stock market be
encouraged and the government should divest completely from the stock market.
Likewise, competent representatives of institutional investors should be appointed as
directors to the boards of listed companies and a mechanism for electing representatives
of individual investors be put in place to encourage individual investors participation in
the management of firms they own. | en |
