Fund managers move to calm the market on banking sector storm
Investment brokers at the NSE. Many banks are listed at the securities exchange. PHOTO | FILE
What you need to know:
Fund Managers Association (FMA), an umbrella body representing 11 managers, said despite the concerns the banking sector “still offers an array of viable investment opportunities.”
Members include African Alliance Asset Management, Apollo Asset Management, Aureos Kenya Managers, British American Asset Management and Co-op Trust Investment Services.
Fund managers have moved to calm investors, saying they remain positive about the capital markets despite recent banking crisis that ended with the putting of Chase Bank under statutory management.
Several banks are listed on the Nairobi Securities Exchange (NSE) where the managers invest billions for pension funds and other mutual funds.
In a notice published Tuesday, the Fund Managers Association (FMA), an umbrella body representing 11 managers, said despite the concerns the banking sector “still offers an array of viable investment opportunities.”
“In view of the recent happenings within Kenya’s banking sector, the Fund Managers Association would like to reassure both individual and institutional investors that it is our opinion the outlook of Kenya’s capital market remains positive,” the lobby said.
Members include African Alliance Asset Management, Apollo Asset Management, Aureos Kenya Managers, British American Asset Management and Co-op Trust Investment Services.
Others are Fusion Investment Management, GenAfrica Asset Managers, ICEA Lion Asset Management, Old Mutual Investment Group (Kenya), PineBridge Investments East Africa, Stanlib Asset Management and Vista Capital.
They welcomed the speedy re-opening of the troubled Chase Bank under KCB management, saying together with the contingency bailout package for troubled banks by the Central Bank, they reflected the regulators’ commitment to safeguarding investors.
“The FMA welcomes the Central Bank of Kenya (CBK) quick action to reopen one of the banks, and appreciate the earlier initiative of setting up a liquidity support framework for the banking sector,” the association said.
“It is our belief these efforts have helped bolster confidence in the sector.”
Best practice
Chase Bank reopened last Wednesday under KCB management working with Kenya Deposit Insurance Corporation after the regulator on April 7 placed it under receivership after a run.
Following the uncertainty that engulfed the banking sector, the CBK said it would provide cash to any needy commercial or microfinance bank. Experts at the time said the cushion was long overdue and is in line with the best practice in advanced financial jurisdictions like Europe and America.
Governor Patrick Njoroge said the facility would ensure the solvency of financial institutions and restore confidence in the banking system.
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