[2008-08-13]  Kenya Govt Moves to Reform Growing Capital Markets
The Capital Markets Authority has lined up a range of strategic reforms aimed at boosting the authority's oversight role in the Kenyan capital market.

CMA chief executive officer Ms. Stella Kilonzo said the reforms are aimed at transforming the country into a financial hub for the East and Central Africa region.


Towards this end, the authority will in conjunction with the capital markets of the other East African Community (EAC) countries move to harmonize legal provisions for the industry.

The harmonized EAC capital market will provide opportunities with a view of expanding the range of financial products and impetus for the market.

"Our ability to strategically engage at the international level is necessary.

We shall seek greater engagement at the regional and international level through bodies such as East Africa Securities Regulators Association (EASRA)," she said during a media conference to highlight the new strategies which she termed as the vision for the industry in Nairobi.

The authority will among other things encourage long term securities aimed at long term development financing as opposed to the short term securities as is the case currently.

This will include the formalization of the Over the Counter (OTC) securities, encouragement of real estate investment trusts and strengthening collective investment schemes in the industry.

The real estate investment trusts will aim at increasing ownership of real property in the country. Currently, very few Kenyans own homes and land.

The authority is currently in the process of establishing a working committee that will drive the implementation of the OTC market.

This will consider both the equity and bond market.

The new reforms will also formalize the implementation of infrastructure bonds as a viable avenue of raising capital.

"We are currently working with the treasury and CBK to engage viable state corporations to positively consider and issue infrastructure bonds as an avenue of raising capital," said Kilonzo.

Kilonzo said the authority will work to demystify the perception that collective investment schemes and unit trusts require huge amounts of investment.

"our direction will be to engage different providers of unit trust and also to ensure the public and investors have access to value adding information that facilitates effective comparison of the unit trusts," said Kilonzo.

Towards this cause, she said the authority has engaged in aggressive education and information campaign to sensitise the public on collective investment vehicles.

The capital markets boom in the country has led to an influx of stockbrokerage companies, though a positive move, the situation has also seen rogue stockbrokers in the country misappropriate customer funds with the recently collapse of the Nyaga and Francis Thuo stock firms

Source: Allafrica