Why do companies in Cameroon resist to be financed through the financial market? (original) (raw)
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Equity financing is a one way of obtaining capital that entails giving up a partial interest in the company to investors by selling equity shares. Initial public offering (IPO), as one way raising equity capital so as to finance firm's operation the main objective of this study is to identify factors motivating companies going public and challenges they have faced in the process. Examining motivational factors for firms IPOs and challenges faced is vital in pointing out issues that may require the scrutiny of policy makers. Our research is descriptive in its nature it only tries to explain what is there only. We have collected our data using structured questioner. After coded the data has been analyzed using SPSS version 20. We used descriptive statistics such as frequency and percentages, mean, and one sample t-test. We have found that the leading cause for establishing the company is the prevailing demand-supply gap on the product or service it is going to produce; high financial demand of the project, lowering coast of capital and enhancing bargaining power, broadening the public base of the company, are the leading factors motivating companies to issue shares so that they can raise required capital and start operation. With respect to challenges, investors low interest, low potential to invest in shares, and their poor understanding about investing in shares, absence of trained stock brokers and stock exchange are the four highly rated challenges in the IPO process.
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The study, titled Stock Market Listing and Company Performance in Rwanda aimed to explore the connection between a company's stock market listing and its performance. Examined within were firms listed in the Rwanda Stock Exchange, specifically Bralirwa, KCB, and BK. Utilizing a quantitative research design, the study relied solely on secondary data, primarily the financial statements of the three companies that operated in Rwanda between 2008 and 2015. The scope included BK, Bralirwa, and KCB. Data gathered from 2010 to 2012 was structured in tables, with financial ratios computed and subsequent analysis conducted using SPSS to ascertain the relationship between stock listing and financial performance. The results demonstrated a positive yet statistically insignificant relationship between stock listing and the financial performance of the listed firms. Notably, the correlation between financial leverage and financial performance lacked statistical significance (R = 0.303, P > 0.01) and showed a negative correlation with market ratio (0.582, P > 0.01). Recommendations included a call for improved liquidity management, especially in working capital for firms like BK, to address the impact on liquidity levels while maintaining financial stability. Stakeholders were encouraged to recognize the linkage between stock listing and financial performance and adopt suitable measures to assess and analyze the financial status of companies. Moreover, the study revealed that companies in Rwanda tend to rely more on short-term debt than long-term debt, potentially due to the underdeveloped bonds market in the country. Liquidity ratios exhibited a negative relationship with financial leverage, indicating that highly profitable and well-performing companies in Rwanda tend to have less debt and rely more on internal financing sources, aligning with the pecking order theory. Furthermore, the study emphasized considering the market value of capital structure in evaluating stock listing, given its stronger connection to financial performance compared to the book value.
FACTORS INFLUENCING INDIVIDUAL INVESTOR BEHAVIOUR DURING INITIAL PUBLIC OFFERS IN KENYA
Kenyan equity market exhibits trends of over-subscriptions during Initial Public Offer (IPO) in the recent years. Though the profit gains in IPOs are dismal in the short run and majority of Kenyan retail investors are also short term, there still exists a market rush whenever there is an IPO issue. Descriptive research design was applied during this survey which involved interviewing the retail investors at Nairobi Securities Exchange (NSE). The study established that investors feel awareness is the most important factor before making investment decision. Adoption of internet and mobile marketing and awareness program will enhance the public knowledge on IPO and investment at the stock exchange. In general, it has been observed that women are more risk averse than men, the young are more risk seeking than the old, wealthier individuals manifest a greater willingness to invest in equities and the poor are risk averse. Access to information about the performance of companies was suggested to be the key element in stakeholder recognition of a company's share index performance. Internet is increasingly important since the web gives better and freer exchange of information. Finally, Capital Market Authority (CMA) should put in place stringent regulations to protect retail investors from fraudulent and unhealthy practices in the market.
International Journal of Current Aspects in Finance, Banking and Accounting, 2021
Market reacts differently to various factors ranging from economic political, and socio-cultural. The stock prices of quoted companies in Kenya are affected either positivity or negatively by a number of factors occurring within or without the economic system. Initial public offering is often issued by smaller, younger companies seeking the capital to expand, but can also be done by large privately owned companies looking to become publicly traded. The initial public offering is a vital step for young entrepreneurial firms, providing them access to the public equity market for the first time. Previous literature had focused primarily on initial public offering under-pricing phenomenon to measure the performance of companies. However, researchers argued that initial public offering pricing, which was a key factor in under-pricing had remained relatively unexplored in literature. The study employed descriptive research design. The study targeted a total population of 7 quoted companie...