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Kenya bourse drops UK-owned firms in index lineup
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10:21, July 21, 2007

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Three British multinationals and their subsidiaries have been dropped from the Nairobi Stock Exchange (NSE) list of most profitable firms for failing to meet trading benchmarks, the bourse chairman Jimnah Mbaru announced here Friday.

In a new review of the NSE 20-Share Index, which includes most profitable companies trading at the bourse, Unilever Tea, a Kenyan subsidiary of the British multinational, was replaced by a Kenyan sugar milling firm, Mumias Sugar Company.

The review of the NSE 20-share index was done to bring on board newly listed firms with active trading track-records and give the market a better image, which reflects the true value of the bourse as opposed to retaining less active stocks in the Index.

The 20-Share Index is a reflection of the 20 most active trading counters. The review would see the NSE market capitalization increase substantially with the entry of the profitable firms from the country''s fastest growing economic sectors.

Kenya Electricity Generating Company (KENGEN), which was listed in March, 2006, replaced the British Oxygen Company (BOC) Gases in the energy sector while Rea-Vipingo, one of the largest tea plantation firms, edged out Kakuzi, its competitor.

Rea-Vipingo is an agricultural firm which owns large tracks of land in the East African country''s tea growing areas. It replaces Kakuzi, whose counter at the NSE has remained dormant due to what the NSE chief attributed to the hoarding of shares by investors.

"We have decided to review the 20-share Index. The companies needed to meet certain criteria, among them to have at least 20 percent of the shares regularly available for trade," Mbaru told a news conference in Nairobi.

"We have replaced smaller companies with bigger companies. The more active companies would be a better market barometer," he added.

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