World Bank turns to local market for cover from forex shocks

The private sector has also been active in issuing corporate bonds.

Some of the corporate bonds expected in the market include Sh10 billion by Housing Finance and Sh5 billion by National Housing Corporation (NHC).

Mr Kihanda says the recent capital easing in the money market through the various rights issues is likely to determine the outcome of the bond.

A number of companies have issued rights issue.

KCB Bank concluded its rights issue by raising Sh12.4 billion out of the targeted Sh15 billion.

Other firms such as TPS Serena and Standard Chartered Bank have rights issue of Sh1.2 billion and Sh1.5 billion respectively.

The flotation by the IFC is bound to create excitement among investors and point to viable investment opportunities in the region.

“There are enough projects in the region to generate healthy returns and it would be easier for the IFC to fund these ventures in local currency,” says Rogers Kinoti, fund manager at ICEA Asset Management.

Hot pick

Mr Kihanda says that due to the reputation of IFC, fund managers and institutional investors are expected to strongly pitch for the offer.

“The bond provides for further diversification with the reputation of the IFC and its backing from the World Bank affirming its creditworthiness in the eyes of investors, making it a hot pick for portfolios,” said Mr Kihanda.