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Kenya floats U.S. 400 million dollars Treasury
Bonds for budgetary support amid low uptake

NAIROBI (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.


Kenya plans reforms to boost uptake of capital market products

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 Friday.

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 edition.

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," he noted.

Kenya money market liquidity tightens on low government spending

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 Saturday

"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 expensive borrowing.

"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.



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