Equity’s broker licence signals shake up of stock market

Equity and CBA banks have received stockbrokerage licences to allow them directly trade shares for their clients at the Nairobi Securities Exchange (NSE), in a development that could shake up the market given Equity’s game-changing role in the banking sector.

The NSE said in a statement on Monday it had admitted the two as “trading participants”, a term used to describe intermediaries with direct access to the stock market trading platform.

The admission also follows demutualisation of the exchange, which separated ownership from trading rights. The NSE is now a private limited company jointly owned by 22 stockbrokerage houses and the government.

Opening membership

“The admission of CBA Capital and Equity Investment Bank shows the commitment of the board to opening up membership of the exchange in order to affirm Kenya’s position as the financial services hub of East and Central Africa,” said NSE in a statement.

The vice chairman, Bob Karina, said the NSE was keen to admit new trading participants through a clear and transparent process.

“This is part of our move to being a demutualised exchange with self-regulatory responsibilities. Priority will be given to market participants with existing licenses from the CMA,” said Mr Karina.

Equity Investment Bank got an investment banking licence from the CMA in 2008.

“The Equity brand is associated with the empowerment of the unbanked and the poorly banked segments of the population,” said the NSE.

CBA Capital, which was licensed as an investment bank by the CMA in 2003, is an affiliate company of the Commercial Bank of Africa Group.

“CBA Capital intends to leverage on the M-Shwari customer base to provide local and regional access to Kenya’s capital markets,” said the NSE.