New Listings at Bourses Boost for Share Registrars

Business Daily (Nairobi)

David Mugwe

22 July 2011

This year’s new listings at various stock exchanges in the East African region have opened up opportunities for share registrars.

Registry services have been facing intense competition causing them to expand into other countries and diversify into other revenue streams.

The share registrars, who have also been investing in technology and offering value added services such as coordinating annual general meetings, are looking to attract new clients from companies listing on the bourses.

The new entrants include Bralirwa, which was listed on the Rwanda Stock Exchange (RSE) in February through an initial public offer.

The deal was handled by Kenya’s Central Depository and Settlement Corporation (CDSC).

The CDSC, which is the only central depository in Rwanda, is also handling the ongoing Bank of Kigali IPO that closes at the end of this month through its subsidiary CDSC Registrars Rwanda Ltd. Comprite Kenya Ltd is handling CfC Insurance Holdings shares that listed by introduction in April, while little known Funguo Registrars saw increased business with Uchumi Supermarkets’ relisting at the Nairobi Stock Exchange (NSE) in May.

Co-operative Bank is handling TransCentury shares that listed early this month, while British American shares expected to list on the bourse are being handled by Image Registrars.

“The last IPO was in November 2008, we believe the new listing will boost the share registry industry,” said Custody and Registrars (C&R) general manager Kerry Ann Makatiani.

Three months ago C&R said that its operations in Tanzania and Uganda were growing. C&R is the largest provider of share registrars’ services in Kenya boasting of 18 listed firms as their clients, accounting for 33 per cent of the business on the NSE.

The expansion drive is expected to help the company tap into listed firms on the Uganda Securities Exchange, Dar-es-Salaam Stock Exchange, and RSE.

Ms Makatiani said the firm was diversifying revenue streams while remaining focused on growing business in share registry, adding that listed companies managing in-house share registrars were incurring unnecessary high operational costs.

Outsourcing services

“Outsourcing of share registry services reduces operational costs and also enables firms to maintain a good relationship with investors,” she said.

Companies are able to concentrate on their core business as share registry requires focus and full resource deployment, said Ms Makatiani. In February, Image Registrars Ltd said they were also working on plans to set up operations in Uganda and Rwanda. Institute of Certified Public Secretaries of Kenya chief executive Joshua Wambua said the new listings not only provided opportunities for the share registrars, but also offered openings for individuals with certified public secretary qualifications.

“The work of maintaining the share registrar is with share registries, but this does not transfer responsibility from the company secretary to the share registrars,” said Mr Wambua.

He said that many share registrars had automated their services to become more efficient. As share registrars prepare to exploit arising opportunities, the Capital Markets Authority (CMA) is spearheading initiatives to introduce efficiency in the transfer of securities outside the trading system at NSE.

Already, an ad hoc committee comprising of representatives of NSE, CDSC, Kenya Association of Stock Brokers and Investment Banks, and some share registrars has been formed to review the process and recommend the way forward.

Other companies that have expressed interest in listing at the NSE include CIC Insurance, Deacons, and Family Bank.

AllAfrica – All the Time