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Kenya

Banks urged to embrace online trading

NAIROBI, September 2 – Commercial banks and stockbrokerage firms have been urged to integrate their financial systems so as to facilitate online trading.

Afrika Investment Bank Chief Executive Peterson Mwangi told reporters Tuesday that online trading would reduce the reliance on cash thus reducing the settlement risk and also enhancing confidence in the financial sector.

“It is going to make the market more vibrant; it’s going to make it more liquid and actually bring in more investors,” he said of the system’s benefits.

With this system, when a client’s order is executed, it would immediately reflect on their account.

He said system integration was already possible with modern technology, and the only thing remaining was the industry’s resolve to increase nation-wide access to investment banking.

Stockbrokers are already using the Automated Trading System (ATS), which enables them to trade from their offices.

Mwangi said both the Capital Markets Authority and the Central Bank of Kenya would then offer the regulatory supervision.

He spoke during the formal launch of Afrika Investment Bank, which was formally operating as Ashbu Securities, a stockbrokerage firm.

“Our capital markets are going through a time of transition and therefore companies have to re-invent themselves,” Mwangi said, pledging to continue rolling out new products and services in the market to suit their diverse clients.

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He said they would use their success as a stock broker to build on their investment firm, which would also venture into the region by 2010.

“Africa is well endowed with resources and talent. We want to help the continent’s people to harness resources they have to move them to the next level,” he vowed.

Vice President Kalonzo Musyoka who spoke at the function assured players in the sector that the government was working closely with market intermediaries as they automate their back office operations to ensure strong financial sector fundamentals.

“The government will also facilitate the Nairobi Stock Exchange to become an effective self regulatory organisation through such measures as demutualisation,” the VP added.

He challenged investment banks to finance public public-private sector partnerships in key infrastructural projects and promised to ensure a better business environment to enable them to operate.

“This way, Kenya will be widely marketed as a strong economic hub for more investments,” Musyoka added.

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