CIC Insurance has backed down from listing new shares at the Nairobi Securities Exchange (NSE) due to the bearish run and will instead raise additional capital through a rights issue to fund its regional expansion plan. The insurer said it will seek to list its current shares at the Nairobi bourse by introduction next year–meaning that company will not raise capital by having its shares trade at the stock market. CIC was targeting to raise KES1.8bn from the planned IPO and its set the stage for the offer after it received shareholder approval to create 90 million shares that were to be split into 20 parts to create 1.8 billion shares. Nelson Kuria, CIC’s managing director, said the insurer made the about-turn fearing that it would fail to hit its fund raising target in the bearish market and hurt the value of its stock from the additional shares. “There is a downturn at the stock market and listing by introduction is the best way to mitigate the risk of shareholder wealth erosion,” said Mr Kuria. The firm needs money to finance its expansion plans into the regional markets with countries like South Sudan, Tanzania and Rwanda its targets. Share price erosion at NSE has seen investors lose KES316.2bn since the beginning of the year and the market index shed 30.6 per cent of its value to stand at 3,115.64 points in the period. The latest listing at the bourse – insurance firm Britak – was undersubscribed after investors bought 60 per cent of the shares that were put on offer. It raised KES3.52bn against a target of KES5.85bn. Still, other fresh listings that include investment firm TransCentury have seen their shares shed more than 41 per cent of the value since their debut. This market performance has forced Family Bank to put its listing plan on hold. Reduced interest from foreign investors, high inflation and the currency woes has reduced investor participation at the NSE and analysts reckon it is unlikely to return to its peak next year. “The depression in the market is likely to persist into next year. While inflation may ease and the shilling strengthen, the general election will have a negative impact on the market”, said Gregory Waweru, an analyst at Kestrel Capital. CIC Insurance will be following in the footstep of Transcentury and Equity Bank in listing through introduction. The insurer’s plan to list is aimed at boosting trading of its shares and offer a perfect exit opportunity to the more than 1,350 cooperative societies and individuals that own the firm. Its shares have been trading at Suntra Investment Bank on the over the counter (OTC) market since 2007, and news of listing has sparked a rally for the shares to the current KES80 from KES40 a year ago.