Capital Markets Authority acting CEO Wycliffe Shamia (R) and Nairobi Stock exchange CEO Geoffrey Odundo during a workshop on Sovereign Green Bond Project at Enashipai Resort in Naivasha in January 2020. Shamia exuded confidence that the performance of the Nairobi Securities Exchange (NSE) will improve this year. After enjoying big rewards, bondholders are now staring at big losses.
The market has remained illiquid for some time now.
From the look of it, no corporate bond portfolio was safe as each sector saw their underlying bonds lose value and demand in the secondary market, thanks to the confidence crisis triggered by the collapse of key bonds. Read More
The saving grace seems to be the green bond that began trading at the Nairobi Securities Exchange (NSE) earlier this year.
Besides, two bonds have in the last few months received an early call, meaning the issuing companies have made arrangements to settle the debt before their maturity.
The last five years have seen at least five big firms that have floated a corporate bond , including at the NSE, collapse spectacularly, inflicting endless grief on investors.
Since then, capital markets experts led by the regulator have been scrambling to restore confidence, but the appetite for the private commercial paper seems to have died long ago.
Investors often focus on stock and bond prices as a measure of an economy’s health.
If the returns are high and rising, they feel upbeat. Conversely, if price levels sink low, so does investor confidence.
Things remain shaky after the recent retail and banking crisis that dealt a major blow to market confidence.
Some experts are now worried about a looming bubble in corporate debt. But the regulator has played down the current depressed market, saying the trend does not reflect a decline in general market performance that has remained upbeat.“The belief that firms are shunning the capital markets may, therefore, not be based on fundamentals. Yes, there is a decline in activity in the corporate bonds market, but it is inaccurate to suggest that the capital market is on a decline,” said CMA in a statement.Chase Bank, Imperial Bank, Athi River Mining (ARM) and Nakumatt are some of the firms that have sunk with unpaid corporate bonds.Others having problems repaying include Consolidated Bank and SME lender Real People.EABL was the last company to issue a bond at the NSE in April 2017.The acting chief executive of CMA, Wyckliffe Shamiah, has been on overdrive, coming […]
