This week, representatives from these global institutions will convene with senior officials from the CMA as well as key market stakeholders in Nairobi to help address regulatory and market-based impediments to liquidity, and advise on the development of new products and services to improve market access.
“The CMA is pleased to partner with FSVC, Bloomberg and the SEC on this important program,” said CMA Chief Executive Paul Muthaura. “After a comprehensive review and analysis of the securities market, the CMA has identified several areas for improvement, including securities lending and borrowing (SLB), strengthening of collective investment schemes (CIS) reporting and structuring and, in line with the ambitions of the 10-year Capital Market Master Plan, positioning Kenyan securities and the overall market for inclusion in the right market indices. This week’s consultations are an important first step in building the capacity of the CMA and market participants to develop new products and services that will enhance liquidity.”
Improved liquidity, or volume and pace of trading, in capital markets is vital to improving the attractiveness of the market through ensuring easier entry and exit.
In recent years, Kenya’s capital markets have registered impressive growth and development in virtually all parameters, thanks in part to reforms initiated to encourage the deepening of the markets. This rapid growth has brought to light, however, several challenges that limit its future growth. These challenges highlight the need for stronger market infrastructure, increased diversification of financial products and services to cater to the growing needs of investors and issuers, and the need to improve the level of awareness among potential and existing investors regionally and internationally.
To help address these challenges, FSVC, with the support of Bloomberg, is providing technical expertise from the U.S. SEC, Bloomberg and Fordham Law School that will help build the capacity of the CMA and market intermediaries.
FSVC is a not-for-profit organization that deploys volunteer experts to emerging market countries to help strengthen financial sectors. FSVC has assisted scores of countries in establishing and deepening their capital markets over the last 26 years.
“Bloomberg has a long-standing commitment to promoting the business and economic interests of sub-Saharan Africa,” said Bloomberg LP Chairman Peter T. Grauer. “Stronger trade and investment ties between the U.S. and African countries are mutually beneficial, and East Africa is a region of enormous strategic importance as well as economic potential. We are delighted to partner with FSVC to help Kenya realize more of its tremendous promise by promoting greater domestic and foreign investment through its capital markets.”
Over the course of this week, capital market experts from Bloomberg and volunteer experts from FSVC, including representatives from the SEC, will meet with CMA officials, financial sector regulators and market stakeholders to present international best practices in adopting and implementing SLB and CIS transparency, as well as offer suggestions for new products which will facilitate trading on the Kenyan market. The volunteer experts will also discuss the adoption of measures that will enable the recognition of Kenyan markets on globally competitive indices.
“Drawing upon FSVC’s significant expertise in the area of capital markets development, these consultations will help enable the CMA to develop new products and undertake key reforms to improve liquidity,” FSVC President & CEO Andy Spindler stated. “Robust capital markets play a critical role in sustainable economic development by mobilizing domestic savings and foreign capital for longer-term, productive investment. Kenya has already made significant strides in this area, and, thanks to the support of Bloomberg, FSVC will help the CMA establish a vibrant and competitive financial sector driving economic growth in the region.”
According to one of the SEC volunteer experts participating in the program, Julie Preuitt, “The CMA has done a commendable job in adopting necessary reforms to deepen its capital markets. The SEC is pleased to provide supplementary guidance and support to its peers at the CMA as they seek to position Kenya as a world class financial center and regional financial hub.”