Kenyan stockbrokers shelve threat to suspend trading at NSE

Nairobi, Kenya: Stockbrokers have retreated from a threat to suspend trading at the Nairobi Securities Exchange due to a court case involving the reintroduction of a capital gains tax.

Kenya Association of Stockbrokers and Investment Banks, who had threatened to boycott trading for a month, said trading would resume as normal on Friday.

"In the interest of maintaining the sanctity and stability of the capital markets in Kenya, the Council of KASIB has further resolved that they shall not suspend trading services," said the brokers' association, KASIB, in a statement distributed by the regulator, the Capital Markets Authority.

The row over whether or not they should collect Capital Gains Tax on behalf of the Government would have put at stake, a daily turnover worth Sh1.2 billion at the Nairobi bourse.

The immediate casualties are government sponsored bonds — used to finance budget needs, foreign direct investment, and firms pushing to raise funds — all valued at billions of shillings.

The case by the Kenya Association of Stockbrokers and Investment Banks (Kasib) pits the lobby against the Attorney General (AG) and the Kenya Revenue Authority (KRA).

Kasib Chief Executive Willie Njoroge said the action wass meant to enable upholding of the rule of law until the case is determined.

"It also allows for the creation of an avenue for consultations with the relevant authorities to find a way of complying with the law in its entirety," said Njoroge on Thursday.