NSE players seek back office system
By James Anyanzwa
Key stakeholders in the stock market have agreed to take concrete steps to restore investor confidence.
In a rare show of unity since the bear run hit the equity market last year, chief executives of the Capital Markets Authority (CMA), Nairobi Stock Exchange (NSE), Central Depository and Settlement Corporation (CDSC) Ltd and the Kenya Association of Stockbrokers and Investment Banks (Kasib) met in Nairobi to chart the way forward.
The stakeholders considered among other things modalities of implementing the Broker Back Office (BBO) system whose absence has largely been blamed on the rampant unauthorised sale of clients’ shares by brokers.BBO is used by brokers and investment bankers to accept the buy/sell orders from investors, executed electronically.
The system, which is often located in the brokers’ offices, accepts investors’ instructions and relays them to the Automated Trading System (ATS) at the NSE. The CMA chief executive Stella Kilonzo said in spite of various reforms which have resulted in improved market performance and development, abuses at the primary and secondary levels coupled with the need to apply ATS to increase efficiency have remained a big challenge.
" Capital Markets are yet to enjoy the full benefits of the ATS and CDS. There is need to synchronise these systems with brokers back offices system," said Kilonzo. "We are about 70 per cent down from our performance last year. This is due to waning investor confidence, reduced activity in the stock market, slowed economic growth, inflation, famine, water shortage, political uncertainty and collapse of some market intermediaries," said Rose Mambo, chief executive CDSC Ltd.
She said the key concern is safety of investors’ investments. Mambo said only 5,000 new CDS accounts have been opened in the past three months.
She said some investors have given up on putting their monies in the stock market owing to the agony they undergo when seeking compensation after the collapse of a broker.
Mambo said many investors also feel they were reaped off and ill advised to borrow from commercial banks to invest in Safaricom’s initial public offering.
"Our ailing economy has done little to improve the situation at the stock exchange. But we must act swiftly and forcefully to resuscitate the stock market," said Michael Gichohi, chairman Kasib.
The brokers and investment bankers however pointed accusing fingers at Citi Bank NA, saying the multinational still holds an approximated Sh250 million of outstanding claims.
Feedback - Kibaki victory not responsible for post-election violencePNU Vice-Chairman in charge of Election Affairs George Nyamweya’s (pictured) statement is unreasonable. Did Kenyans wake up one morning and start fighting?
When Njonjo almost resigned over coffee smugglersKnown as the era of black gold, it began in 1976 when Ugandan farmers decided to sell their coffee in the private market.
Asbel Kiprop denies sustaining head injuries in nightclub fight
- Two missing men found dead inside vehicle in Lucky Summer
By Mate Tongola
- Court says State acquired prime Eldoret land from owner legally
- US offers Sh233m bounty for two suspects wanted for drug, wildlife crimes
By Betty Njeru
- Disquiet in Kenya Kwanza over Rigathi Gachagua's 'careless' outbursts
- Wilson Airport airspace to be closed Saturday