Nairobi Securities Exchange CEO Geoffrey Odundo, Sports Cabinet Secretary Amina Mohammed and Homeboyz Entertainment CEO Myke Rabar at the listing of Homeboyz Entertainment in the Growth Enterprise Market Segment of the NSE on December 21, 2020 in Nairobi. PHOTO | FILE | NMG Kenya’s quest to become an international financial hub has suffered a setback after the Capital Markets Authority (CMA) failed to achieve key performance indicators.
The authority cited the Covid-19 pandemic, waning investor confidence in the capital markets and low uptake of investment products and limited listings on the Nairobi Securities Exchange for the failure.
Attaining an international financial hub status would have increased the country’s capacity to attract multi-million dollar foreign inflows by 2023.
Last week, the market regulator said it has engaged the services of a consultant with the support of Financial Sector Deepening (FSD) Africa to review the 10-year Capital Market Master Plan (2014-2023), after it emerged that 46 per cent of key performance targets will not be achieved within the next two years.
“Covid-19 related effects are likely to affect related targets such as market capitalisation to gross domestic product, target savings rate, and bond and equities turnovers to GDP. This could require rebasing,” CMA’s chief executive Wycliffe Shamiah told The EastAfrican in an interview last week.
The project seeks to establish Nairobi as a well-functioning financial hub by accelerating economic growth, and consolidate Kenya as a leading financial centre in East and Central Africa.
CMA had hoped to achieve an MSCI Emerging Market status for Kenya by 2020, and by 2023 to transform the country into the choice market for domestic, regional and international issuers and investors looking to invest in and realise their investments in the region and across central Africa.
Failure to achieve key capital markets growth indicators makes the transformation into a financial centre by the year 2023 an uphill task. The failed targets include growing the ratio of equity market capitalisation to GDP to 70 per cent in 2023 from 50 per cent in 2014, increasing equity market capitalisation to $84 billion, and reforming the Growth Enterprise Markets Segment (GEMS) to ensure at least three to four listings annually.
CMA had also hoped that the ratio of outstanding corporate bonds to GDP could reach 40 percent by 2023 from the current less than one per cent, and that the value of outstanding exchange-traded derivative contracts would get to $200 billion by 2023.
The percentage of infrastructure investment […]