New CMA boss states her vision

August 4, 2008

, NAIROBI, August 4 – New Capital Markets Authority Chief Executive, Stella Kilonzo, has promised to revolutionise the market through introduction of new strategies.

Kilonzo told Journalists Tuesday that she planned to champion the development of new products and financial services, improve the Authority’s institutional capacity as well as market infrastructure.
“The Capital Markets Authority (CMA) has commissioned a number of studies in a bid to strengthen the securities market for financing of long term development,” she said.

The studies, she explained, looked at issues ranging from Over-the-counter markets, viability of Real Estate Investment Trusts, growth of Collective Investment Schemes and the operations of stock brokering agents in the country.

Already some results of these studies are being implemented. The Authority has set up a working committee to drive the implementation of the Over the counter market in addition to working with the Treasury and Central Bank of Kenya to engage viable State Corporations to positively consider and issue infrastructure bonds.

“This year going forward we have received assistance from World Bank and IFC on standing our current bond infrastructure and the study is now complete,” she revealed.

“We actually looked at what happens in other markets and how come these markets are very vibrant and discovered it’s because, unlike us, they trade over the counter while we list our bonds.”  

Kilonzo said the authority is also working at improving the bond market through enhancement of the regulations that govern it and allowing it to become a reality.

“There are also other issues like having a self regulatory body like a bond association and working towards the growth of the bond market under an all-encompassing legislation,” she said.

The government has over the last 2 years announced intention to issue a corporate bond and infrastructure bonds that would be used to finance the construction of roads in the country.  

Speaking as she released her vision for the regulatory body, Kilonzo said plans were also underway to improve the body’s institutional capacity to better manage risks within the industry.

Meanwhile, Kilonzo confided that despite the increased hype on asset-backed financing and real estate bonds, players in the housing industry were yet to approach the CMA with concrete proposals on the same.

In recent times, increased appetite for ownership of real estate and the lack of affordable housing has sparked various debates on the need for introduction of Real Investment Trusts in the country. 

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