Stella Kilonzo (left), Ms Wanjiku Mugane (centre), Mrs Rose Lumumba (right)
Finance minister Njeru Githae will appoint the new Capital Markets Authority chief executive on Tuesday from a shortlist of three candidates that the agency’s board presented to him last week.
The Business Daily has established that the contenders are investment bankers Paul Mwai and Wanjiku Mugane, and a CMA insider, Rose Lumumba.
The position fell vacant following the decision by Stella Kilonzo not to seek a renewal of her contract at the end of her single four-year term on June 30.
Sources close to the recruitment said Mr Mwai — the CEO of investment bank AIB Capital — Ms Mugane of Standard Chartered Securities and Ms Lumumba, the CMA’s corporation secretary, made it to the shortlist in a process that also attracted Rose Mambo the chief executive of the Central Depository & Settlement Corporation.
Mr Githae confirmed the shortlist and promised to announce Ms Kilonzo’s replacement next week.
“The PS (Joseph Kinyua) informed me that the CMA board had forwarded the shortlist of three candidates for the position on Friday,” Mr Githae said in a phone interview from London where he is marketing Kenya to foreign investors at the Olympics.
The three individuals were shortlisted from a list of 20 applicants interviewed by management consultants Hawkins and Associates.
Applicants were required to be holders of a master’s degree backed by 10 years experience in securities and financial markets as minimum qualifications.
Mr Mwai has an MBA from the Strathmore Business School and has been in the financial services business since 1992. He has previously served as the CEO at African Alliance, and as an employee of African Alliance Kenya Management Company, among others.
Ms Mugane is an investment banker working with Standard Chartered Securities which in 2009 bought out the remaining 75 per cent stake in First Africa Group – the firm she co-founded.
The bank’s purchase of the first 25 per cent stake in the firm forced Ms Mugane to resign from the board of Equity Bank in 2007 to avoid conflict of interest.
Ms Mugane holds a Master of Laws (LLM) from Georgetown University and a law degree from (LLB) from the University of Nairobi besides various accounting and finance credits. She has extensive experience in deal-making, including mergers and acquisitions.
Her name had featured prominently among the likely candidates in the race to replace Edward Ntalami who left the CMA as chief executive in 2007 but the then Finance minister Amos Kimunya appointed Ms Kilonzo to the post.
Ms Rose Lumumba is currently the director in charge of Communications and the Corporation Secretary at CMA.
The new CEO is expected to face numerous challenges regulating Kenya’s capital markets which have been hit by numerous financial scandals and corporate governance challenges in the recent past.
The CMA has also announced plans to create a new market, dubbed the Growth and Enterprise Market Segment (GEMS), where small and mid-sized companies will be listed, allowing them to raise capital and unlock value for shareholders.
The regulator is also set to introduce Real Estate Investment Trusts (REITs) which will allow small investors to pool funds and invest in the booming property market, owning liquid shares in the investment vehicles which they can trade like other equities. Players in the market said that the new CEO’s focus should be on deepening the financial markets through introduction of new products such as commodities trading and encouraging the growth of existing equities and debt instruments.
“The focus should now shift from regulation to the development of the capital markets,” said James Wangunyu, the managing director of Standard Investment Bank.
Mr Wangunyu wants the regulator to particularly focus on the introduction of new products and transactions, including commodities trading and securities lending or short selling that is common in the developed world.
CMA stepped up its market surveillance in the past four years following the collapse of Francis Thuo and Partners, Nyagah Stockbrokers, Discount Securities, and Ngenye Kariuki and Company in the past five years.
The regulator recently launched a real-time trading surveillance system and has raised the capital requirement for investment banking and stock brokerage licenses to a minimum of Sh250 million and Sh30 million respectively from the previous Sh30 million and Sh5 million.
Market players also expect the selection process to produce a strong chief executive with a profile that is equal to that enjoyed by the governor of the Central Bank of Kenya.
Professionals
This is seen as the best means of attracting highly skilled professionals to the job as well as provide the leverage for strict enforcement of compliance in the capital markets.
The appointment of the CMA boss comes at a time when Kenya is fighting for a larger pool of foreign investors with an eye on higher returns from emerging and frontier markets such as Nigeria, Egypt and South Africa.
