Factors leading to slow growth in listed firms on stock markets in the East Africa region: the case of Nairobi Security Exchange(NSE).

Abstract

A stock market is a key component of a vibrant economy. It is not only vital to the listing company but to the government too. It is thus, an obligation of the respective Governments to offer an enabling environment friendly enough to various firms and encourage them to list and be active in stock markets. Some of the benefits that accrue to a firm from listing include creating a market for the company's shares, enhancing the status and financial standing of the company, increasing public awareness and public interest in the company and its products ,providing the company with an opportunity to implement share option schemes for their employees, increasing access to additional fundraising in the future by means of new issues of shares or other securities, facilitating acquisition opportunities by use of the company's shares, and offering existing shareholders a ready means of realizing their investments among others. The study established existence of various factors which hinder the listing of firms at NSE. These factors include institutional factors, environmental factors, regulatory factors, historical factors, informational factors. Subsequently the study has suggested strategies to overcome these hindrances.