Pre and Post Financial Performance of Firms Privatized Through the Nairobi Stock Exchange

Abstract

The study sought to find out ifthere is a major difference in performance of State owned enterprises firms privatized through the Nairobi Stock Exchange (NSE). In addition it had an objective of developing a predictive model for state owned enterprises that were privatized through the ( NSE).The study analysed six state owned enterprises that were privatized through the Nairoibi Stock Exchange. The extent of contributiuon of financial ratios to performance was analysed. The ratios used were profitability ,liquidity leverage and activity ratios. The data was analysed using regression analysis and correlation tests. Hypothesis testing was done using the Z tests at 95 % level of significance,to find out ifthere is significant difference between pre and post privatization performance. The findings shoi;a that generally privatizatiJ'n resulted to improved results in the finance and commercial sector, but not in the industrial sector. The findings also showed that profitability ratios were positively related to performance and leverage ratios were most'negatively related to performance. Liquidity and leverage ratios showed mixed relation to performance The results of hypothesis testing confirmed that pre and post ~.. privatization performance is significantly different when using the profitability and leverage ratios.