Opinion and Analysis
Revamp capital markets
Posted Tuesday, July 31 2012 at 18:41
Finance Minister Njeru Githae is expected to appoint a new chief executive for the Capital Markets Authority in a week.
With recent efforts in the sector having gone towards improving governance both at the Nairobi Securities Exchange and among listed firms, the appointee will be expected to drive the capital markets on an expansion path.
It should be remembered that the broadening of investment options available through the capital markets was hamstrung by the knock of public confidence suffered after a handful of stockbrokers collapsed because of mismanagement and outright fraud.
More recently, fluctuations in economic fundamentals have left particularly fixed income securities wanting, with investors unsure where to direct their resources.
These challenges call for a regulator who will diversify products offered through the capital markets, including ground breaking solutions that afford reasonable returns even when equities and treasuries are underperforming.
With Kenya being a predominantly agricultural country, a commodities exchange should be high on the agenda as should be mechanisms through which medium and small enterprises can raise capital for growth.
With innovation in the ICT sector now a beehive of activity in Kenya, getting financing for techpreneurs to commercialise their applications would play a key role in steering the country towards a newly industrialised status by 2030.
The work for the next chief executive is certainly cut out and will have to hit the ground running in raising the profile and relevance of the capital markets.