| dc.description.abstract | The objective of this study was to identify the challenges that companies listed at the
Nairobi Stock Exchange (NSE) and are eligible for cross listing in the regional exchanges
face, and the benefits that accrue or are realizable upon cross listing.
Past research has mainly focused on the impediments to listing at the NSE and the
benefits accruing to firms listed at the NSE. It might be of interest to establish what
challenges and benefits are there in cross listing regionally, Research in different markets
has also come out with different results in addition to highlighting that there are in
majority of cases, net benefits that accrue to firms that cross list.
Regional cross listing has performed dismally since the time the NSE started trading
some 54 years ago and since 2001 when the first Kenyan company cross listed, and with
only a further two companies cross listing into the regional exchanges, namely the
Uganda Securities exchange and the Dar es Salaam Stock exchange thereafter. This is
despite about 40 being listed on the main investment market segment and therefore
meeting the main eligibility requirement for cross listing regionally. This would portend
there are issues or challenges that eligible NSE listed companies have faced.
The study used primary data collected through questionnaires administered to
respondents from 40 targeted eligible NSE listed companies. The response rate for the
questionnaires administered was 60%. The data analysis procedure involved the tabulation
of the responses such as the factors considered by the respondent companies to be
challenges and impediments to regional cross listing. Data was also presented using
tables from coded questionnaires and means, and their rankings were used to analyze and
present the findings.
From the study, the firms' need to attain an increased market visibility, the ability to
finance growth and development out of cross listing initiative, having an improved firm's
image and status, and attaining desired liquidity of company shares, are the main
challenges for eligible NSE listed companies seeking regional cross listing at the Dar es
Salaam and Uganda Stock exchanges. The research findings reveal that the other
challenges firms listed in the Main investment market segment consider or encounter in
order of ranked importance include: the development of strategic alliances and, meeting
shareholder requirements.
However, tax incentives, governance and capital structure issues, received low ratings in
the importance of challenges.
In the case of benefits realizable, those highly rated were attaining an improved corporate
image and prestige, acceptance and recognition of company brand across the region, and
attaining a wider capital base.
With the demystifying of the perception that major bottlenecks exist and hardly any
significant net benefits accrue from cross listing, more eligible companies should cross
list regionally in order to reap the benefits of cross listing. | en |
