The Capital Markets Authority (CMA) is investigating HFCB Group over last week’s release of its financial results during trading hours in breach of capital markets disclosure rules.
CMA said it is reviewing the matter together with the Nairobi Securities Exchange (NSE) and will take action “as appropriate,” raising the possibility of sanctions against the listed firm.
“The Capital Markets Authority is reviewing the matter together with the NSE and will take action as appropriate,” CMA said in an emailed response to the Business Daily queries.
NSE last Thursday halted trading in HFCB shares for the entire trading session after receiving the company’s financial report during market hours.
NSE strictly enforces a daily price movement limit of 10 percent from the previous day's closing price under normal trading conditions.
However, this price ceiling and floor is lifted on the trading session when material corporate announcements such as the release of financial results are made, allowing investors to enjoy open price discovery based on the information.
The release of results without notice to the exchange, therefore, denied investors a chance to benefit from open price discovery since the 10 percent cap was still in place, forcing NSE to halt trading. The shareholders were then allowed to enjoy the window on the next trading day.
HFCB Group published its financial results in the national newspapers on Thursday morning last week, while NSE circulated the group’s financial performance statement to investors after 11:00am. The results showed HFCB half-year net profit for 2026 had increased by 60 percent to Sh998.3 million.
The exchange said the release breached Regulation 89(4) of the Capital Markets (Public Offers, Listings and Disclosures) Regulations, 2023 which require listed firms to “simultaneously” disclose such material information to the CMA, NSE and the public outside the trading hours.
“The information required to be disclosed under these regulations shall be disclosed within 24 hours after the event simultaneously to the Authority (CMA), the securities exchange (NSE) at which the issuer’s securities are listed, if applicable, and to the public during non-trading hours of the relevant market segment,” reads the regulations.
NSE issued its notice shortly after 12:30pm on Thursday, informing investors that trading in HFCB shares had been halted for the day.
CMA on Monday said the requirement to release material information outside trading hours is intended to give investors adequate time to assess disclosures before the market opens and make informed investment decisions.
“The rationale against release of material information during non-trading hours is to ensure that investors can consume the information, for purposes of price discovery, and take it into account before the market opens for trading,” the regulator said.
Follow the story
