(Xinhua) -- Kenya seeks to
raise 400 million U.S. dollars this month through
the sale of Treasury bond for budgetary support.
The money would be raised through a 10-year Treasury
bond worth the amount which the Central Bank put up
for sale on Thursday.
"The Central Bank acting in its capacity as
fiscal agent for the Republic of Kenya invites bids
for the above bond for budgetary support," said the
bank in a prospectus seen Friday.
Investors will start bidding on August 10 and the
bank will auction the bond on August 22.
The long-term government paper has been floated,
however, at a time when uptake of the securities is
low as investors focus on short-term Treasury bills.
Last month, the Kenyan government issued a
20-year Treasury bond worth 400 million dollars for
budgetary support but it recorded a lacklustre
performance, with the overall subscription rate
coming in at 35 percent.
reforms to boost uptake of capital market
NAIROBI (Xinhua) --
Kenya is considering
implementing a series of legal and regulatory
frameworks that will boost uptake of capital market
products, a financial industry regulator said on
Paul Muthaura, the CEO of the Capital Market
Authority (CMA), told Xinhua in Nairobi that over
the past four years only four companies have listed
on the Nairobi Securities Exchange (NSE) with the
last one being in 2016.
"In order to spur the uptake of capital market
instruments, we are seeking to put in place reforms
to lower requirements while ensuring that investors
are protected," Muthaura said during the launch of
the Excellence in Financial Reporting Awards 2018
The awards will be focusing on enhancing
confidence in capital markets by deepening best
corporate governance practices in the region.
Muthaura said the government is concerned about
the low uptake of capital products despite the need
in the economy for long term finance by both
government and the private sector.
The CMA will partner with the NSE as well as
market participants to address the gaps that exist
that lock out corporates from using the capital
markets to raise capital.
Muthaura said the reforms will enable riskier
companies to list at the exchange but only allow
sophisticated investors who have expertise to invest
in the firms.
According to the CMA CEO, there is a big
awareness gap as regards the time it takes for firms
to list at the bourse.
He noted that an application to join list capital
market products could be approved in a period of 25
days or less if all conditions are met.
"We are therefore going to enhance our
sensitization campaign among market participants
such as accountants, stock brokers and investment
bankers to ensure that the firms meet requirements
before they make applications," he said.
He revealed that firms often have to improve
their governance structures and financial reporting
systems before they can allowed to join the NSE in
order to protect consumers.
In 2013, the NSE introduced the Growth Enterprise
and Market Segment (GEMS) to attract more Small and
Medium Enterprises to list the bourse.
"However only four companies have listed at the
GEMS despite the incentives that we have rolled
out," he said.
The capital markets regulator hopes that the new
reforms will ensure that small firms entry into the
capital markets is fast tracked.
Muthaura noted that most of the companies that
have been listed in the past four have not made
impressive returns for investors.
"This has not provided an incentive for other
firms to use the capital markets to raise finance,"
market liquidity tightens on low government
NAIROBI (Xinhua) --
Liquidity in Kenya’s money market was
tight this week as government spending remained low
for a second week in a row.
The tight liquidity pushed up the interbank rate
to a high of 9 percent from 8.4 percent at the end
of last week, Central Bank of Kenya said in a brief
"Interbank market liquidity conditions remained
relatively tight during the week reflecting the
seasonal low government spending at the beginning of
the fiscal year.
The weighted average interbank rate increased to
9 percent on Friday," said the apex bank.
The cash transacted between commercial banks
declined during the week as the institutions shunned
"The average volumes traded declined to 114
million U.S. dollars from 123 million dollars in the
previous week, while the average number of deals
decreased to 29 from 36," said the bank.