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The Nairobi stock exchange and new equity capital: 1998 to 2004.


The objectives of any stock exchange include two interlinked concepts. Their primary market role is to facilitate the movement of capital from savers Savers, Inc. headquartered in Bellevue, Wash., is a privately held for-profit thrift store chain offering the best in secondhand shopping. An international company, Savers has more than 200 locations throughout the United States, Canada and Australia, and receives its merchandise  to investors. In process of the primary market activities they will often aggregate the resources of small individual savers into sufficiently large In mathematics, the phrase sufficiently large is used in contexts such as:
is true for sufficiently large
 capital sums that they can be successfully invested by commercial companies. In their secondary market role, by facilitating transactions between willing buyers and sellers they establish fair market prices for existing shares (the efficient markets hypothesis). In turn, this secondary market role of share pricing enables (primary market) new share issues to be priced at, or close to, fair market prices, thus militating against disadvantaging the issuers or the buyers of those new shares. The two roles are, therefore, interdependent.

The nature of the stock markets of developed countries need no rehearsal re·hears·al
The process of repeating information, such as a name or a list of words, in order to remember it.

re·hearse v.
 here: suffice suf·fice  
v. suf·ficed, suf·fic·ing, suf·fic·es

1. To meet present needs or requirements; be sufficient: These rations will suffice until next week.
 it to say that the stock exchanges of New York New York, state, United States
New York, Middle Atlantic state of the United States. It is bordered by Vermont, Massachusetts, Connecticut, and the Atlantic Ocean (E), New Jersey and Pennsylvania (S), Lakes Erie and Ontario and the Canadian province of
, London London, city, Canada
London, city (1991 pop. 303,165), SE Ont., Canada, on the Thames River. The site was chosen in 1792 by Governor Simcoe to be the capital of Upper Canada, but York was made capital instead. London was settled in 1826.
, Tokyo Tokyo (tō`kēō), city (1990 pop. 8,163,573), capital of Japan and of Tokyo prefecture, E central Honshu, at the head of Tokyo Bay.  and so on have been material positive factors in the burgeoning economies of the USA, Europe Europe (yr`əp), 6th largest continent, c.4,000,000 sq mi (10,360,000 sq km) including adjacent islands (1992 est. pop. 512,000,000).  and certain parts of Asia for many years past.

Some parts of the developing world have also used stock exchanges as vehicles of development, with perhaps China and India India, officially Republic of India, republic (2005 est pop. 1,080,264,000), 1,261,810 sq mi (3,268,090 sq km), S Asia. The second most populous country in the world, it is also sometimes called Bharat, its ancient name. India's land frontier (c.  being the most obvious recent examples. The Shanghai Stock Exchange Shanghai Stock Exchange

One of two major securities markets in China.
 (SSE (1) An earlier full-screen editor in OS/2.

(2) (Streaming SIMD Extensions) A series of additional instructions built into Pentium CPU chips for improved multimedia performance by performing mathematical operations on multiple sets of data at the
) was founded on 26th November November: see month.  1990 (Devonshire-Ellis, 2007). At the end of 2005, the SSE boasted 1069 listed securities and 834 listed companies, with a combined market capitalization Market Capitalization

A measure of a public company's size. Market capitalization is the total dollar value of all outstanding shares. It's calculated by multiplying the number of shares times the current market price. This term is often referred to as market cap.
 of RMB RMB Right Mouse Button
RMB Regional Management Board (USACE)
RMB Rolf Maier Bode (musician, band)
RMB Ren Min Bi (currency of People's Republic of China) 
 2,310 billion (SSE, 2005). In 2005, listed companies raised RMB 3 billion on the SSE through Initial Public Offerings (IPO (Initial Public Offering) The first time a company offers shares of stock to the public. While not a computer term per se, many founders, employees and insiders of computer companies have found this acronym more exciting than any tech term they ever heard. ) and share placements (SSE, 2005). There were a total of 131 new listings between 2003 and 2005 (SSE, 2005)

Stock exchanges in Africa appear to have missed out on many of the opportunities seized seized (seised) n. 1) having ownership, commonly used in wills as "I give all the property of which I die seized as follows:...." 2) having taken possession of evidence for use in a criminal prosecution. 3) having taken property or a person by force. (See: seisin, seizure)  elsewhere. Although there is a long history of stock exchanges in African nations, some going as far back as colonial times, their growth rates Growth Rates

The compounded annualized rate of growth of a company's revenues, earnings, dividends, or other figures.

Remember, historically high growth rates don't always mean a high rate of growth looking into the future.
 have generally been slow, or even stagnant stagnant /stag·nant/ (stag´nant)
1. motionless; not flowing or moving.

2. inactive; not developing or progressing.
, and their role in capital mobilization mobilization

Organization of a nation's armed forces for active military service in time of war or other national emergency. It includes recruiting and training, building military bases and training camps, and procuring and distributing weapons, ammunition, uniforms,
 appears, in many cases, to have been negligible This article or section is written like a personal reflection or and may require .
Please [ improve this article] by rewriting this article or section in an .

Quoting data from the World Bank's Financial Structure database, Honahan and Beck list fifteen stock exchanges active in sub-Saharan Africa (i.e. ignoring the substantial and active stock exchanges in Mediterranean Africa, such as those in Morocco Morocco, country, Africa
Morocco (mərŏk`ō), officially Kingdom of Morocco, kingdom (2005 est. pop. 32,726,000), 171,834 sq mi (445,050 sq km), NW Africa.
, Tunisia Tunisia (tnē`zhə, ty–), Fr. Tunisie, officially Republic of Tunisia, republic (2005 est. pop.  and Egypt Egypt (ē`jĭpt), Arab. Misr, biblical Mizraim, officially Arab Republic of Egypt, republic (2005 est. pop. 77,506,000), 386,659 sq mi (1,001,449 sq km), NE Africa and SW Asia. ).

The NSE NSE - Network Software Environment: a proprietary CASE framework from Sun Microsystems.  was established in 1954: only South Africa South Africa, Afrikaans Suid-Afrika, officially Republic of South Africa, republic (2005 est. pop. 44,344,000), 471,442 sq mi (1,221,037 sq km), S Africa.  (1887) and Zimbabwe Zimbabwe, ruined city, Zimbabwe
Zimbabwe (zĭmbäb`wā) [Bantu,=stone houses], ruined city, SE Zimbabwe, near Fort Victoria. It was discovered by European explorers c.
 (1896) are older. The remaining exchanges were all established in the last 25 years of the 20th century. Of those fifteen stock exchanges South Africa is clearly an outlier outlier /out·li·er/ (out´li-er) an observation so distant from the central mass of the data that it noticeably influences results.


an extremely high or low value lying beyond the range of the bulk of the data.
, while Kenya Kenya (kĕn`yə, kēn`–), officially Republic of Kenya, republic (2005 est. pop. 33,830,000), 224,960 sq mi (582,646 sq km), E Africa.  is typical of the other fourteen. These all share the following features: a limited number of stocks is listed, market capitalization is a small percentage of GPD gpd
gallons per day
, value traded is a small percentage of GDP GDP (guanosine diphosphate): see guanine. , turnover is low, the concentration of firms is low and few bonds are listed. Parkinson Par·kin·son , James 1755-1824.

British physician who gave (1817) a comprehensive description of paralysis agitans, or Parkinson's disease, and was the first to recognize (1812) perforation of the appendix as a cause of death in appendicitis.
 (1984) examined the NSE in the context of development in Kenya. He reported that the NSE failed to make enough issues to satisfy savers' demands. Earlier Yacout (1980) had noted the heavy oversubscription Oversubscription

The excess number of shares or bonds that investors want to buy but are not available due to high demand.
 of new issues in Nigeria Nigeria (nījĭr`ēə), officially Federal Republic of Nigeria, republic (2006 provisional pop. 140,003,542), 356,667 sq mi (923,768 sq km), W Africa.  and concluded that; there too, available savings were greater than new stock market issues. In this article we will focus on the Nairobi Stock Exchange The Nairobi Stock Exchange (NSE) is the stock exchange of Kenya. It began in 1954 as an overseas stock exchange while Kenya was still a British colony with permission of the London Stock Exchange. The NSE is a member of the African Stock Exchanges Association.  (NSE). The method is to examine the capital structure of all the companies listed on the NSE. We will attempt to differentiate between those companies that needed capital for expansion and those that did not. In respect of expanding companies we will attempt to identify how they financed their expansion. We will focus on three main categories of sources of finance: primary market transactions (that is, new share issues); organic growth (through the ploughing back of profits); and lastly, borrowing. In this way we will make an informed judgment of the way the NSE has contributed to the raising of capital and the development of the economy.

We will also set the compare the sum of stock market activity against aggregate information for Kenya as a whole, to get a sense of the scale of its activity.


According to according to
1. As stated or indicated by; on the authority of: according to historians.

2. In keeping with: according to instructions.

 the Efficient Markets Hypothesis (EMH EMH Efficient Market Hypothesis
EMH Eastern Maine Healthcare
EMH Emergency Medical Hologram (Star Trek)
EMH Emerging Market Handset
EMH Elyria Memorial Hospital (Elyria, OH)
EMH Educably Mentally Handicapped
) all relevant information is immediately and accurately impounded in the market prices of shares. If the EMH holds true it is not possible to make an abnormal return Abnormal Return

When the return on an asset or security is in excess of the expected rate of return.

Earning 30% in a mutual fund that is supposed to average 10% would be an abnormal return. Much like winning the lottery, this is something we want to happen.
 by trading on the basis of available information. For a detailed discussion of the history and early development of the EMH see Fama (1970).

Empirically the EMH is tested in three forms: weak form; semi-strong form and strong form. A typical weak form test would be to check for any serial correlation between share prices on consecutive dates. The absence of serial correlation implies that the share prices are performing a random walk. It is generally agreed that stock prices are weak form efficient. A typical semi-strong form test would be to examine the behaviour of a share price immediately before, during and immediately after a known event such as an earnings announcement or a takeover agreement. As with weak form tests, there is extensive support for semi-strong form efficiency, particularly in respect of the stock markets of the developed world. The strong form of the EMH states that all information, public and private, is fully and immediately impounded in share prices. As it is not possible, by definition, to know all the private information, the strong form is not a testable hypothesis.

In this study we are not so much interested in technical efficiency, though that has been assessed by Dickinson Dickinson, city (1990 pop. 16,097), seat of Stark co., SW N.Dak., on the Heart River; inc. 1919. It is a processing and shipping center for a livestock, dairy, and wheat region, as well as a service center for the Williston Basin oil industry. Dickinson State Univ.  and Muruga (1994) and Parkinson (1987) in respect of the NSE. As is observed in both those studies, even if the market deviates somewhat from technical efficiency, the thinness of market trading militates against investors being able to profitably trade on that knowledge. We are more interested in the question asked by Samuels and Yacout (1981). Their question, put in the context of Nigeria was: what contribution did the stock exchange make to the mobilization of capital and the development of the economy?

The purpose of a stock exchange in the developing country context is nicely put by Sudweeks (1989).

"Financial development work should respond to specific development objectives of individual countries. These are to contribute to faster, sustainable and socially equitable equitable adj. 1) just, based on fairness and not legal technicalities. 2) refers to positive remedies (orders to do something, not money damages) employed by the courts to solve disputes or give relief. (See: equity)

 economic growth. These can be achieved through intermediation (bringing together both investors and borrowers), efficient allocation The apportionment or designation of an item for a specific purpose or to a particular place.

In the law of trusts, the allocation of cash dividends earned by a stock that makes up the principal of a trust for a beneficiary usually means that the dividends will be treated as
 (allocating resources to their most productive use), adequate savings mobilization (mobilizing mobilizing,
v 1. freeing or making loose and able to move.
2. observing any ongoing movements in a client's body, whether small or large, assisted or not, that identify strengths and weaknesses, as well as the client's physical and
 savings through financial instruments, rather than real assets), stability (absence of financial crisis, effective term transformation, and adequate risk capital), adequate accumulation of retirement funds for investors' nonproductive non·pro·duc·tive  
1. Not yielding or producing: nonproductive land.

2. Not engaged in the direct production of goods: nonproductive personnel.

 years), and social equity through broad access (allowing all members of society an opportunity to access the financial markets). An efficient and stable financial system will involve the creation of many different types of financial institutions and instruments. This ensures a reasonable distribution of savings among short-term (deposit-type or money market) instruments, long-term debt instruments (bonds) and risk capital (stocks and related instruments) to meet the overall financing needs of the economy." (Sudweeks, 1989, p 4)

One of the dimensions of any stock exchange is its relationship to the economy in which it operates. Useful comparative statistics are somewhat problematical here, but one useful source is the World Bank Data which shows the market capitalization of stock market securities by country, area and for the world as a whole.

"Definition: Market capitalization (also known as market value) is the share price times the number of shares outstanding. Listed domestic companies are the domestically incorporated companies listed on the country's stock exchanges at the end of the year. Listed companies do not include investment companies, mutual funds, or other collective investment vehicles." (World Bank, 2007).

Honahan and Beck (2007, p. 51) indicate that, for the eight most active stock exchanges in Africa other than Johannesburg (that is: Botswana, Cote d'Ivoire, Ghana, Mauritius Mauritius (môrĭsh`ēəs, –əs), officially Republic of Mauritius, republic (2005 est. pop. 1,231,000), 790 sq mi (2,046 sq km), in the SW Indian Ocean. It is part of the Mascarene Islands, c.500 mi (800 km) E of Madagascar. , Mozambique, Namibia, Nigeria and Zimbabwe) the stock market capitalization as a percentage of GDP rose from about 13% in 1994 to about 23% in 2005.

The NSE is a country with one of the lowest ratios of stock market capitalization to GDP. In 2000 it was 10.1%, compared to 89.3% for the world as a whole: by 2005 it had increased to 34.1%, which, though a substantial increase over 2000, was still a small fraction of the 137% recorded for the world as a whole (World Bank, 2007). The logical conclusion is that while the role of stock markets generally is on a growth trajectory Trajectory

The curve described by a body moving through space, as of a meteor through the atmosphere, a planet around the Sun, a projectile fired from a gun, or a rocket in flight.
 everywhere, including Africa, the NSE plays a comparatively minor role in the economy of Kenya After independence, Kenya promoted rapid economic growth through public investment, encouragement of smallholder agricultural production, and incentives for private (often foreign) industrial investment. Gross domestic product (GDP) grew at an annual average of 6.6% from 1963 to 1973. .

By the end of 2004, the NSE had a total of 49 listed companies. These were classified into two market segments; The Main investments Market Segment (MIMS MIMS Music Is My Savior (music album)
MIMS Medical Information Management System
MIMS Multimedia Integrated Modeling System (US EPA)
MIMS Membrane Introduction Mass Spectrometry
) and the Alternative Investment Market Segment (AIMS). The MIMS represents the main quotation QUOTATION, practice. The allegation of some authority or case, or passage of some law, in support of a position which it is desired to establish.
     2. Quotations when properly made, assist the reader, but when misplaced, they are inconvenient.
 market and has more stringent eligibility, listing and disclosure requirements (Wangacha, 2001). As at the end of 2004, this segment had 44 listed companies, which are further classified into four categories (agricultural, Commercial and services, Banking and Financial and Industrial and allied segments) (NSE, 2004). The AIMS has the same strict disclosure requirements as the MIMS but has a lower entry and continuance The adjournment or postponement of an action pending in a court to a later date of the same or another session of the court, granted by a court in response to a motion made by a party to a lawsuit.  requirements with respect to minimum assets, share capital and shareholders. By the end of 2004, this segment had only five companies (NSE, 2004)

Overall statistics for the NSE are summarized in table 2. This shows, for the years 1998 to 2004, the book value of total assets for all companies listed on the NSE, broken down into debt and equity, and the equity broken down into shares and reserves. Reserves, in this context, are predominantly pre·dom·i·nant  
1. Having greatest ascendancy, importance, influence, authority, or force. See Synonyms at dominant.

 retained earnings Retained Earnings

The percentage of net earnings not paid out in dividends, but retained by the company to be reinvested in its core business or to pay debt. It is recorded under shareholders equity on the balance sheet.
, but also include other monies set aside out of earnings, whether legally distributable (such as a general reserve) or legally not distributable (such as a revaluation Revaluation

A calculated adjustment to a country's official exchange rate relative to a chosen baseline. The baseline can be anything from wage rates to the price of gold to a foreign currency. In a fixed exchange rate regime, only a decision by a country's government (i.e.


Table 2 show the equity raised by companies in the agricultural segment and the changes in their total assets during the period 1998-2004.

According to the results companies in the agricultural sector did not obtain any equity capital during the period under review. Indeed these companies borrowed over Kshs. 2 billion outside the NSE to finance operating losses.

Table 3 show the equity raised by companies in the Commercial and services segment and the changes in their total assets during the period 1998-2004.

Companies in this segment registered significant growth during the period under review. The total assets increased by over Kshs. 22 billion (93.7%). However only Kshs 226 million was raised though the NSE. Most of the expansion was financed through debt. It is to be noted that out of the nine companies in this segment only two companies issued shares to the public during this period (Appendix 1).

According to the results in Table four the total assets of banking sector increased by over Kshs. 112 billion during the period under review. Eight out of the 11 companies in this sector issued shares through the NSE raising a total of Kshs. 8.2 billion. However this amount is insignificant when compared to the Kshs. 102.4 billion that was raised through debt to finance expansion.

This is the largest segment in the NSE with a total of 20 listed companies. During the period under review ten of these companies issued share to the public through the NSE. A total of Kshs. 1.82 billion was raised. We however note that the total assets in this segment increased by over Kshs. 19.1 billion. Fifty-four percent of this expansion was finance through debt which increased by about Kshs 10.3 during this period.

The alternative segment had five listed companies. During the period under review, one company (Kenya Orchards Ltd) made an IPO which raised over Kshs. 57 billion. However most of the capital was used to finance operating losses that increased by over Kshs. 52 billion during the period. Overall the total assets in this sector increased by about Kshs. 121 billion. Much of this expansion was financed through borrowing, which increased by over Kshs.115 during the period under review.

Table 7 summarizes the changes in equities and total assets of the companies listed in the MIMS. According to the results only 6.6% of the expansion in this market was finance through new equity capital. Eight-seven percent of the changes in total assets acquired during this period was finance through borrowing which increased by over Kshs.132 during the six year period. In total 22 of the 44 companies in this segment issued new shares during the period (appendix 1). However these issues only raised Kshs. 10.3 billion which is insignificant when compared to the total investment in assets of Kshs. 154.5 billion during the period.


This study addressed the issue of whether the NSE has contributed to the raising of capital and hence the economic development in Kenya. Our findings indicate that although the company's listed in the NSE have registered an enormous growth during the period under review, much of this has been financed through borrowed capital and retained profits. We therefore conclude that the NSE has failed in its primary objective of helping investors to raise capital. Furthermore there is little evidence to suggest that the NSE has contributed to the economic development of Kenya. These findings confirm earlier finding by Kimura and Amoro (1999), who concluded that there was no significant correlation between economic growth and the growth of the NSE during the period 1985-1996. Future research may be directed towards the examination of why the NSE has failure to promote capital mobilization in Kenya. We suggest the use case study approach.

Agricultural Sector (Kshs.'000')

     Equity Type           Company Name                       1998

1    Total share capital   Unilever Tea Kenya Limited         488750
     Reserves              Unilever Tea Kenya Limited         4794064
     Total debt            Unilever Tea Kenya Limited         784794
2    Total share capital   Kakuzi Limited                     98000
     Reserves              Kakuzi Limited                     1993174
     Total debt            Kakuzi Limited                     848079
3    Total share capital   Rea Vipingo Plantations Ltd        300000
     Reserves              Rea Vipingo Plantations Ltd        208824
     Total debt            Rea Vipingo Plantations Ltd        334518
4    Total share capital   Sasini Tea and Coffee, Ltd         190046
     Reserves              Sasini Tea and Coffee, Ltd         1940015
     Total debt            Sasini Tea and Coffee Ltd          341656

Services and Commercial Sector (Kshs.'000')

5    Total share capital   African Tours & Hotels Ltd         43400
     Reserves              African Tours & Hotels Ltd         -8607
     Total debt            African Tours & Hotels Ltd         8928
6    Total share capital   Car & General (Kenya) Ltd          111398
     Reserves              Car & General (Kenya) Ltd          171050
     Total debt            Car & General (Kenya) Ltd          363665
7    Total share capital   CMC Holdings Limited               121398
     Reserves              CMC Holdings Limited               1248526
     Total debt            CMC Holdings Limited               2746844
8    Total share capital   Hutchings Biemer Limited           3000
     Reserves              Hutchings Biemer Limited           16895
     Total debt            Hutchings Biemer Limited           167677
9    Total share capital   Kenya Airways Limited              2308000
     Reserves              Kenya Airways Limited              4199000
     Total debt            Kenya Airways Limited              6885000
10   Total share capital   Marshalls (East Africa) Ltd        72466
     Reserves              Marshalls (East Africa), Ltd       1135566
     Total debt            Marshalls (East Africa), Ltd       1208431
11   Total share capital   Nation Media Group, Ltd            178300
     Reserves              Nation Media Group, Ltd            13585000
     Total debt            Nation Media Group, Ltd            662600

Agricultural Sector (Kshs.'000')

12   Total share capital   Tourism Promotion Services
                           Limited (Serena Hotels)            193395
     Reserves              Tourism Promotion Services
                           Limited (Serena Hotels)            319187
                           Tourism Promotion Services
     Total debt            Limited (Serena Hotels)            443518
13   Total share capital   Uchumi Supermarkets Limited        300000
     Reserves              Uchumi Supermarkets Limited        437886
     Total debt            Uchumi Supermarkets Limited        1121826

Banking Sector (Kshs.'000')

14   Total share capital   Barclays Bank of Kenya Ltd         1543000
     Reserves              Barclays Bank of Kenya Ltd         6626000
     Total debt            Barclays Bank of Kenya Ltd         62193000
15   Total share capital   CFC Bank                           500000
     Reserves              CFC Bank                           1102316
     Total debt            CFC Bank                           5114242
16   Total share capital   Diamond Trust Bank (Kenya)         318000
     Reserves              Diamond Trust Bank (Kenya)         630791
     Total debt            Diamond Trust Bank (Kenya)         5487464
17   Total share capital   Housing Finance Company            575000
     Reserves              Housing Finance Company            969199
     Total debt            Housing Finance Company            11287037
18   Total share capital   ICDC Investment Company            141292
     Reserves              ICDC Investment Company            441409
     Long-term debt        ICDC Investment Company            34334
19   Total share capital   Jubilee Insurance Company          180000
     Reserves              Jubilee Insurance Company          1820263
                           Jubilee Insurance Company
     Total debt            Limited                            2978729
20   Total share capital   Kenya Commercial Bank              1122000
     Reserves              Kenya Commercial Bank              9233900
     Total debt            Kenya Commercial Bank              68677335
21   Total share capital   National Bank of Kenya             1000000
     Reserves              National Bank of Kenya             -593352
     Total debt            National Bank of Kenya             25355992
22   Total share capital   NIC Bank Limited.                  329658
     Reserves              NIC Bank Limited.                  1573444
     Total debt            NIC Bank Limited.                  5439742
23   Total share capital   Pan Africa Insurance Holdings      65000
     Reserves              Pan Africa Insurance Holdings      1622274
     Total debt            Pan Africa Insurance Holdings      944792
24   Total share capital   Standard Chartered Bank Kenya      824145
     Reserves              Standard Chartered Bank Kenya      3169443
     Total debt            Standard Chartered Bank Kenya      33938699

Manufacturing and Allied Sector (Kshs.'000'

25   Total share capital   Athi-River Mining Limited          375000
     Reserves              Athi-River Mining Limited          224946
     Total debt            Athi-River Mining Limited          578382
26   Total share capital   Bamburi Cement Company             1815000
     Reserves              Bamburi Cement Company             8718000
     Total debt            Bamburi Cement Company             1015000
27   Total share capital   British American Tobacco           750000
                           Kenya Limited.
     Reserves              British American Tobacco           3635837
                           Kenya Limited.
     Total debt            British American Tobacco           2079887
                           Kenya Limited.
28   Total share capital   BOC Kenya Limited.                 97627
     Reserves              BOC Kenya Limited.                 942874
     Total debt            BOC Kenya Limited.                 242758
29   Total share capital   Carbacid Investments Limited.      47195
     Reserves              Carbacid Investments Limited.      496897
     Total debt            Carbacid Investments Limited.      32491
30   Total share capital   Crown-Berger Kenya Limited.        107850
     Reserves              Crown-Berger Kenya Limited.        452793
     Total debt            Crown-Berger Kenya Limited.        371412
31   Total share capital   Dunlop Kenya Limited.              50000
     Reserves              Dunlop Kenya Limited.              55804
     Total debt            Dunlop Kenya Limited.              27451
32   Total share capital   East African Cables Limited.       101250
     Reserves              East African Cables Limited.       248007
     Total debt            East African Cables Limited.       70431
33   Total share capital   East African Portland Cement       450000
     Reserves              East African Portland Cement       1250206
     Total debt            East African Portland Cement       4090415
34   Total share capital   East African Breweries Limited.    936022
     Reserves              East African Breweries Limited.    8572542
     Total debt            East African Breweries Limited.    4690044
35   Total share capital   Sameer Africa Limited              1391712
     Reserves              Sameer Africa Limited              487999
     Total debt            Sameer Africa Limited              778216
36   Total share capital   Kenya Oil Company Limited          36000
     Reserves              Kenya Oil Company Limited          870763
     Total debt            Kenya Oil Company Limited          531056
37   Total share capital   Mumias Sugar Company Ltd.          1020000
     Reserves              Mumias Sugar Company Ltd.          4334095
     Total debt            Mumias Sugar Company Ltd.          4861041
                           Kenya Power and Lighting           1098040
38   Total share capital   Company Ltd.
                           Kenya Power and Lighting           4992485
     Reserves              Company Ltd.
                           Kenya Power and Lighting           14893983
     Total debt            Company Ltd.
39   Total share capital   Total Kenya Ltd.                   280000
     Reserves              Total Kenya Ltd.                   792198
     Total debt            Total Kenya Ltd.                   2970396
40   Total share capital   Unga Group Ltd.                    234294
     Reserves              Unga Group Ltd.                    2274500
     Total debt            Unga Group Ltd.                    2921382
41   Total share capital   A.Baumann & Company Ltd.           19200
     Reserves              A.Baumann & Company Ltd.           433003
     Total debt            A.Baumann & Company Ltd.           119653
42   Total share capital   City Trust Ltd                     20830
     Reserves              City Trust Ltd                     175214
     Total debt            City Trust Ltd                     24644
43   Total share capital   Eaagards Ltd.                      8039
     Reserves              Eaagards Ltd.                      176062
     Total debt            Eaagards Ltd.                      48222
44   Total share capital   Express Kenya Ltd                  24000
     Reserves              Express Kenya Ltd                  332199
     Total debt            Express Kenya Ltd                  504105

Alternative Segment (Kshs.'000')

45   Total share capital   Kapchorua Tea Company Ltd          19560
     Reserves              Kapchorua Tea Company Ltd          370978
     Total debt            Kapchorua Tea Company Ltd          150394
46   Total share capital   Kenya Orchards Ltd                 3000
     Reserves              Kenya Orchards Ltd                 -2201
     Total debt            Kenya Orchards Ltd                 89881
47   Total share capital   Limuru Tea Company Ltd             4000
     Reserves              Limuru Tea Company Ltd             27728
     Total debt            Limuru Tea Company Ltd             19234
48   Total share capital   Standard Newspapers Grp Ltd        64152
     Reserves              Standard Newspapers Grp Ltd        27095
     Total debt            Standard Newspapers Grp Ltd        356567
49   Total share capital   Williamson Tea kenya Ltd           43782
     Reserves              Williamson Tea kenya Ltd           1193079
     Total debt            Williamson Tea kenya Ltd           446068

Agricultural Sector (Kshs.'000')

     Equity Type                         2004                  Change

1    Total share capital                488750                   0%
     Reserves                          2630036                  -45%
     Total debt                        2043129                  160%
2    Total share capital                98000                    0%
     Reserves                           992350                  -50%
     Total debt                        1055029                  24%
3    Total share capital                300000                   0%
     Reserves                           275807                  32%
     Total debt                         452854                  35%
4    Total share capital                190046                   0%
     Reserves                          2948031                  52%
     Total debt                         812259                  138%

Services and Commercial Sector (Kshs.'000')

5    Total share capital                58702                   35%
     Reserves                           -11331                  32%
     Total debt                         19423                   118%
6    Total share capital                111398                   0%
     Reserves                           272044                  59%
     Total debt                         343837                  -5%
7    Total share capital                242796                  100%
     Reserves                          2492605                  100%
     Total debt                        3568440                  30%
8    Total share capital                 3000                    0%
     Reserves                          2 40,282                1322%
     Total debt                         163959                  -2%
9    Total share capital               2308000                   0%
     Reserves                          6112000                  46%
     Total debt                        20970000                 205%
10   Total share capital                71966                   -1%
     Reserves                           152669                  -87%
     Total debt                         733483                  -39%
11   Total share capital                267500                  50%
     Reserves                          2632700                  94%
     Total debt                        1192500                  80%

Agricultural Sector (Kshs.'000')

12   Total share capital
                                        193395                   0%
                                        898244                  181%

     Total debt                         962880                  117%
13   Total share capital                300000                   0%
     Reserves                          -190035                 -143%
     Total debt                        3155132                  181%

Banking Sector (Kshs.'000')

14   Total share capital               2037000                  32%
     Reserves                          10438000                 58%
     Total debt                        93720000                 51%
15   Total share capital                720000                  44%
     Reserves                          1802611                  64%
     Total debt                        26791536                 424%
16   Total share capital                397500                  25%

     Reserves                          1039572                  65%

     Total debt                        9730651                  77%

17   Total share capital                575000                   0%

     Reserves                           544926                  -44%

     Total debt                        8340706                  -26%

18   Total share capital                274976                  95%

     Reserves                          2721562                  517%

     Long-term debt                     60496                   76%

19   Total share capital                180000                   0%

     Reserves                          1913796                   5%

     Total debt                        7384270                  148%
20   Total share capital               1996000                  78%

     Reserves                          6584159                  -29%

     Total debt                        61020008                 -11%

21   Total share capital               6675000                  568%

     Reserves                          -4050201                 583%

     Total debt                        27968826                 10%

22   Total share capital                412073                  25%
     Reserves                          2231894                  42%
     Total debt                        13999526                 157%
23   Total share capital                240000                  269%

     Reserves                           559144                  -66%

     Total debt                        2554476                  170%

24   Total share capital               1359839                  65%

     Reserves                          4703355                  48%

     Total debt                        61050733                 80%

Manufacturing and Allied Sector (Kshs.'000'

25   Total share capital                465000                  24%
     Reserves                           521188                  132%
     Total debt                         986764                  71%
26   Total share capital               1815000                   0%

     Reserves                          8048000                  -8%

     Total debt                        4326000                  326%

27   Total share capital               1000000                  33%

     Reserves                          2761025                  -24%

     Total debt                        2360862                  14%

28   Total share capital                97627                    0%
     Reserves                          1055736                  12%
     Total debt                         312927                  29%
29   Total share capital                56634                   20%
     Reserves                           696859                  40%
     Total debt                         186756                  475%
30   Total share capital                107850                   0%
     Reserves                           485856                   7%
     Total debt                         334617                  -10%
31   Total share capital                50000                    0%
     Reserves                           27473                   -51%
     Total debt                         62758                   129%
32   Total share capital                101250                   0%
     Reserves                           215792                  -13%
     Total debt                         175174                  149%
33   Total share capital                450000                   0%

     Reserves                          1352463                   8%
     Total debt                        5667834                  39%

34   Total share capital               1098297                  17%
     Reserves                          12446213                 45%
     Total debt                        5511917                  18%
35   Total share capital               1391712                   0%
     Reserves                           620578                  27%
     Total debt                         974154                  25%
36   Total share capital                50398                   40%
     Reserves                         3 ,342,537                284%
     Total debt                        2841871                  435%
37   Total share capital               1020000                   0%
     Reserves                          4382105                   1%
     Total debt                        3745232                  -23%
                                       1582560                  44%
38   Total share capital
                                       15908659                 219%
                                       14803862                 -1%
     Total debt
39   Total share capital                875324                  213%
     Reserves                          3647427                  360%
     Total debt                        6026038                  103%
40   Total share capital                315454                  35%
     Reserves                          1017360                  -55%
     Total debt                        2254953                  -23%
41   Total share capital                19200                    0%
     Reserves                           245723                  -43%
     Total debt                         121309                   1%
42   Total share capital                20830                    0%
     Reserves                           182757                   4%
     Total debt                          6488                   -74%
43   Total share capital                10049                   25%
     Reserves                           143897                  -18%
     Total debt                         34377                   -29%
44   Total share capital                160925                  571%
     Reserves                           38154                   -89%
     Total debt                         410729                  -19%

Alternative Segment (Kshs.'000')

45   Total share capital                19560                    0%
     Reserves                           653085                  76%
     Total debt                         320388                  113%
46   Total share capital               57228746               1907525%
     Reserves                         -52845974               2400898%
     Total debt                       114535603               127330%
47   Total share capital                12000                   200%
     Reserves                           33937                   22%
     Total debt                         22753                   18%
48   Total share capital                325769                  408%
     Reserves                          -148378                 -648%
     Total debt                         686117                  92%
49   Total share capital                43782                    0%
     Reserves                          2235870                  87%
     Total debt                         878680                  97%


Devonshire-Ellis, C. Shanghai Shanghai (shăng`hī`, shäng`hī`), city (1994 est. pop. 12,980,000), in, but independent of, Jiangsu prov., E China, on the Huangpu (Whangpoo) River where it flows into the Chang (Yangtze) estuary.  & Bombay Bombay (bŏmbā`), former state, W central India, on the Arabian Sea. The state contained within its borders the former Portuguese colonies of Goa and Daman and Diu. Historical remains exist from the period (320–184 B.C.  Stock Exchanges-Different Aspirations aspirations nplaspiraciones fpl (= ambition); ambición f

aspirations npl (= hopes, ambition) → aspirations fpl 
? Available online: shanghai-bombay-stock-exchanges-different-aspiration

Dickinson, J.P., and K. Muragu (1994). Market Efficiency in Developing Countries: A Case Study of the Nairobi Stock Exchange. Journal of Business Finance & Accounting, Vol 21, (1), 133-150.

Fama, E. (1970). Efficient Capital Markets: a Review of Theory and Empirical Work, Journal of Finance. Vol 25, (2), pp 383-417.

Honanhan, P. and T. Beck, (2007). Making Finance Work or Africa. World Bank, Washington D.C

Kimura, J.H and Amoro, Y (1999). Impediments IMPEDIMENTS, contracts. Legal objections to the making of a contract. Impediments which relate to the person are those of minority, want of reason, coverture, and the like; they are sometimes called disabilities. Vide Incapacity.
 to the growth of the Nairobi Stock exchange. Institute of Policy Analysis and Research, Nairobi, Kenya.

Nairobi Stock exchange (NSE), (2004). The NSE Handbook, Nairobi, Kenya

Parkinson, J.M (1984). The Nairobi Stock Exchange in the context of Development in Kenya, Savings and Development, Vol. V111 (4), 363-371

Parkinson, J.M., (1987) The EMH and the CAPM CAPM

See: Capital asset pricing model


See capital-asset pricing model (CAPM).
 on the Nairobi Stock Exchange, East African Adj. 1. East African - of or relating to or located in East Africa  Economic Review. Vol 3, (2), 105-110.

Shanghai stock Exchange (SSE), (2005), The SSE Fact Book, China

Yacout, N.H. (1980) Capital markets in developing countries. Unpublished PhD thesis, University of Birmingham Due to Birmingham's role as a centre of light engineering, the university traditionally had a special focus on science, engineering and commerce, as well as coal mining. It now teaches a full range of academic subjects and has five-star rating for teaching and research in several  

Wangacha, M. (2001) A survey of Enterprise Attitudes Towards Kenya's Capital Market. Institute of Policy Analysis and Research, Nairobi, Kenya

World Bank (2007), Data & Statistics: Online Available;

John M Parkinson, School of Administrative Studies, York University York University, at North York, Ont., Canada; nondenominational; coeducational; founded 1959 as an affiliate of the Univ. of Toronto, became independent 1965.  

Nelson M Waweru, School of Administrative Studies, York University
Table 1: Stock Exchanges in (Sub-Saharan) Africa: 2005

Country:         Number      Market      Value     Turn-
                of listed    Cap. %     Traded     over %
                  firms      of GDP      % of

Botswana           25         27.2        0.6       2.1
Cote d'Ivoire      39         12.3        0.3       2.5
Ghana              30         23.7        0.8       3.2
Kenya              47         26.1        2.1       7.9
Malawi (2002)       8         9.2         1.3       14.1
Mauritius          41         36.0        1.6       4.4
Mozambique          1         30.0        0.0       0.0
Namibia            13         6.9         0.3       4.7
Nigeria            207        16.7        2.3       13.9
South Africa       403       170.5       76.5       44.9
Swaziland           6         8.3         0.0       0.0
Tanzania            6         6.2         0.2       2.5
Uganda              5         1.4         0.0       0.2
Zambia             13         8.0         0.1       1.5
Zimbabwe           79         41.3        2.9       7.0

Country:          Zero      Concent-    Number
                 return      ration    of listed
                 weeks %    of firms   corporate
                of total                 bonds

Botswana            -         0.21        17
Cote d'Ivoire       -         0.21         -
Ghana              70         0.12         3
Kenya              41         0.20         -
Malawi (2002)       -          -           0
Mauritius          48         0.12         1
Mozambique          -          -           -
Namibia            57         0.39         4
Nigeria            67         0.08
South Africa       13         0.06
Swaziland           -          -           2
Tanzania            -          -           6
Uganda              -          -           -
Zambia              -          -           0
Zimbabwe           37         0.08         -

Table 2: Agricultural sector (Kshs. million)

Equity type         1998    2004    Change   Percentage
Share Capital       1077    1077    0        0%
Retained earnings   8936    6846    2090     (23.4%)
Debt                2309    4363    2054     88.9%
Total assets        12321   12286   36       (-3%)

Table 3: Commercial and Services Sector (Kshs. million)

Equity              1998    2004    ChangePercentage

Share Capital       3331    3557     226     6.7%
Retained Earnings   7467    12599    5132   68.7%
Debt                13608   31110   17502   128.6%
Total Assets        24406   47266   22860   93.7%

Table 4: Banking and Financial Services Sector
(Kshs. million)

Equity               1998      2004     Change   Percentage

Share Capital        6598     14,867    8,269      125.3%
Retained Earnings    26595    28,488    1,893       7.1%
Debt                210155    312,591   102435     48.7%
Total Assets        243,349   355,947   112598     46.3%

Table 5: Industrial and allied Sectors (Kshs. million)

Equity               1998     2004    Change   Percentage

Share Capital        8862    10688     1826      20.6%
Retained Earnings   50154    57139     6985      13.9%
Debt                40851    51144    10293      25.2%
Total Assets        99,868   118972   19104      19.2%

Table 6. The Alternative segment (Kshs. Million)

Equity              1998    2004    Change

Share Capital       134    57629    57495
Retained Earnings   1616   -50071   -49909
Debt                1062   116443   115381
Total Assets        2813   124001   121188

Table 7: Summary of the Main Market Segment

Equity               1998     2004     Change   % of total assets

Share Capital       19868     30189    10320          6.6%
Retained Earnings   93,150   105074    11923          7.7%
Debt                266923   399,209   132285         85.7%
Total Assets        379942   534472    154529         100%
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Author:Parkinson, John M.; Waweru, Nelson M.
Publication:Journal of International Business Research
Geographic Code:1USA
Date:Jul 1, 2008
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