Abstract:
The economic stability, the key driver of the boom has seen a rush by companies to raise funds
from the stock markets. It has never been better time for companies to raise capital from the
capital markets. This explains the long list of initial public offers (IPO) and right issues since
2006. Recent IPO include the Kengen, Eveready, scan group, access Kenya and Kenya
re-insurance Corporation.
Mumias sugar also made a second offer while equity bank listed in the Nairobi stock exchange
(NSE) BY introducing, capital holdings made their right issue all seeking additional funds to bank
roll their expansion.
Notably however no agricultural company has featured in the aforementioned IPOs leave alone
seeking additional funds through the bourse. This brings to the lime light the problem of
persistent minimum listing by agricultural companies (currently stands at 8) on the bourse,
despite the fact that Kenya is predominantly an agrarian economy.
The general objective of the study was to find out reasons of low listing by agricultural
companies in the bourse. Specifically study intended to identify challenges for listing in the
bourse, to establish whether companies knows the opportunities at the bourse, to identify the
challenges faced by agricultural companies in Kenya and to establish the need for alternative to
the NSE for companies unable to meet the stringent listing rules of the NSE.
A descriptive study was archived by doing a case study of Del Monte Kenya a Thika based
subsidiary of Del Monte international inc. the target population was the top management who
were issued questionnaires. Secondary data was collected using documentary information from
books, company final accounts and relevant publications.
The study found out a number of issues hindering the listing of agricultural companies on the
bourse which include listing / application fees, unfavorable legal and regulatory framework on
listing, lack of confidence in the NSE and inadequate public awareness.
