Kenya’s listed firms are yet to embrace the roles of investor relations professionals in the running of their businesses, with latest data showing that only 12 firms out of the 66 listed operate the department. These are Equity Bank, Stanbic Bank, Co-operative Bank, Safaricom, Centum, KCB, Kenya Airways, Kenya Electricity Generating Company (Kengen), Britam Holdings Plc, Nairobi Securities Exchange Plc , Kenya Re and East African Breweries Ltd.
The investor relations department is a division of a business, usually a public company, whose job is to provide investors with an accurate account of company affairs in order to help private and institutional investors make informed decisions on whether to invest in the company
It revolves around how a company communicates with investors, shareholders, government authorities and the financial community and ensures that a company’s stock is being traded fairly through disclosure of key facts that allow all investors to assess whether a company is a good investment or not.
“Fundamentally, the role of investor relations is to create an awareness and understanding of the company among the investor community, as well as to help listed companies gain access to capital, achieve liquidity in the market, and attain a fair valuation of the company,” Nairobi Securities Exchange (NSE) Chief Executive Geoffrey Odundo told The EastAfrican.
According to the regulator Capital Markets Authority (CMA), the creation of investor relations departments is currently not mandatory for listed companies but they are required to have structures to communicate with the investing fraternity.
“Investor relations officer is not a mandatory position for listed companies as of now. Each company is simply expected to have structures that enhance its interaction with stakeholders. Different companies have created different structures to handle this aspect,” said Wycliffe Shamiah, CMA chief executive.
NSE has 66 listed companies of which five (Marshall East Africa Ltd, Hutchings Biemer, A. Baumann, KenolKobil Ltd and Atlas African Industries) have been delisted and five (National Bank of Kenya, Deacons (East Africa), ARM Cement Mumias and Kenya Airways) have been suspended.
Last year, Kenya’s capital market recorded significant decline in key indicators on account of foreign investors sale of assets at the height of the pandemic, while local investors divested to the safe bonds market, according to Central bank’s Financial Sector Stability report (2020)
“Market volatility was high at the onset of the lockdown with liquidity of the equities market declining to the lowest level. The balance sheet of many corporates contracted in 2020, due to subdued aggregate demand following Covid–19 containment measures,” according to the report.