(Bloomberg) -- Kenya's markets regulator is considering allowing blank-check firms to list on the local stock market in an attempt to spur initial share sales in East Africa's biggest economy.
The last initial public offering in Kenya was in 2015 when Stanlib Fahari I-REIT sold securities, according to data compiled by Bloomberg. The Nairobi Securities Exchange's All Share Index has fallen 7.5% this year.
“In the last five to ten years, the Kenyan capital markets have witnessed limited listing of companies on the Nairobi Securities Exchange,” Kenya's Capital Markets Authority said in a report. “SPAC listings provide an alternative listing model within shorter time periods when compared to traditional IPO listing procedures.”
While Kenya is hoping to lure companies with easier rules, investors in the U.S., where special-purpose acquisition companies raised billions of dollars, are losing interest in the industry. At least 56 SPACs with ambitions to raise more than $16 billion have been called off this year as U.S. regulators clamp down.
Kenya will need clear regulations on the operation of SPACs, including on how the money raised by the entities will be utilized for such IPOs to succeed, said Nairobi Securities Exchange Chief Executive Officer Geoffrey Odundo.
SPACs are called blank checks because they raise cash from investors through a public offering with the goal of buying a private business.
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