ABSTRACT:- This investigation looked at the link between firm ownership characteristics and long run return on firms that issued equity at the Nairobi Securities Exchange (NSE) in Kenya. The study covered 12 firms that issued shares in the NSE market. Ownership characteristics considered included (state ownership, institutional ownership, foreign ownership, big five shareholders, market capitalization, age of the firm and leverage of the firm) in relationship to average return. The study tested whether each of the firm ownership characteristics had influence on long run performance. Annual returns for these companies was based on market return for a period of five years after shares were issued. Long run performance was compared with three benchmarks namely; NSE index, CAPM and matching firms. Seven hypotheses were developed for the study. Simple-liner regression and multi-linear regression analyses based on panel data were carried out so as to project the long run return on shares issued. The study’s outcomes point out that issuing firm performed better than non-issuing firms. These issuing firms also performed better as compared to CAPM. However the issuing firms performed worse than NSEI. In conclusion the long run performance of equity issued at the NSE does not necessarily underperform relative to non-issuing establishments.

Keywords:- State Ownership, Institutional Ownership, Foreign ownership, Big five shareholders, Leverage, Age and Market Capitalization, Long run return.