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Investors balk as shrinking stock prices plague Kenyan Bourse

By Bedah Mengo NAIROBI (Xinhua) -- The Kenyan bourse is attracting a small number of local investors as potential ones keep off due to shrinking stock prices.

The market has lost the sparkle of yesteryears when Kenyans would flock to stock brokerage firms to open Central Depository and Settlement (CDS) accounts and invest in stocks.

The East African nation’s citizens mainly invested in stocks of homegrown firms that include Safaricom, Kenya Power, Kengen, Kenya Airways and Mumias Sugar.

A majority of the stocks are currently trading below the initial public offer price save for a few like Safaricom, Kenya’s leading telecom, Equity Bank and Kenya Commercial Bank (KCB).

The worst hit sectors include insurance, where Britam on Monday traded at a low of 8 shillings (0.08 U.S. dollars), Corporate Insurance Company (CIC) 0.03 dollars and Liberty 0.1 dollars.

Kenya Power and Kengen in the energy sector, initially the best blue-chip stocks at the stock market, are trading at lower than the initial public offer price.

The former traded at 0.04 dollars and the latter 0.06 dollars on Monday, the price they have stayed put since the start of the year.

Kenya Airways in the transport sector and Mumias Sugar in manufacturing are the other worst performing stocks as the companies continue to chalk up losses.

On Monday, the stocks traded at 0.03 dollars and 0.003 dollars respectively.

Some of the best performing stocks include Safaricom, which traded on Monday at 0.27 dollars, over five times the IPO price, while Equity Bank and KCB traded at 0.39 dollars.

The general decline in prices of stocks has affected investors’ wealth, with market capitalization standing at 22 billion dollars on Monday, down from 26 billion dollars two years ago.

Similarly, the NSE 20 Share Index, which measures the performance of blue-chip stocks stood at 2,639.22 on Monday, a decline from over 3,000 dollars last year.

Latest data from the Capital Markets Authority showed on Tuesday that the number of CDS accounts opened by locals in 2018 stood at 14,442 from a peak of 31,739 in 2015.

Fred Ajwang, a computer technician in Nairobi, who was initially enthusiastic about the stock market, said Tuesday, he cannot invest at the market due to low returns.

"My father introduced me to the stock market in 2007 by offering to buy me 100 Kengen shares that were on initial offer.

"I later bought myself three other stocks but I am yet to make any money from most of the shares," said Ajwang.

Ajwang, as many other small Kenyan investors, has, however, invested at the debt market, last month buying into part of the 2.5 million dollars mobile bond dubbed M-Akiba floated by the National Treasury.

One only needs 30 dollars to invest into the risk-free bond, making it appeal to many small investors, with the bond recording 30,232 new registrations, according to Rose Mambo, the chief executive of CDS Corporation.

Ernest Manuyo, a business management lecturer at Pioneer Institute, attributed apathy of local investors towards the stock market to several factors, among them declining stock prices, reduced disposable income, lack of returns from previous investments and rising cost of living.

Kenya Safaricom launches fraud intelligence solution curb cybercrime

by Ronald Njoroge NAIROBI (Xinhua) -- Kenya’s telecom operator Safaricom on Tuesday launched a fraud intelligence solution for financial institutions in the country in order to curb cybercrime.

Sitoyo Lopokoiyit, Chief Financial Services Officer of Safaricom, told journalists in Nairobi that the anti-fraud tool will help banks and insurance firms better authenticate mobile and internet banking customers.

"In addition to authentication, the solution will also provide financial firms with capabilities to better design their lending propositions, enhance the registration and on boarding of new customers, and also in managing phone numbers linked to a customer’s accounts but which may no longer be in use," Lopokoiyit said.

Safaricom controls approximately 65 percent of Kenya’s telecom market which has an estimated 50 million mobile subscribers.

"Through the years, we have developed in-house capabilities that have helped us cut down on attempted fraud incidences targeting our customers by more than 75 percent," he added.

He revealed that the solution works across the three channels including USSD, internet banking and smartphone apps.

"Such banking channels have been on the rise in the country corresponding with increasing internet and smartphone usage," he added.

Lopokoiyit added that the adoption of the anti-fraud tool is expected to benefit the country through increased usage of mobile and internet banking due to increased confidence both from the financial sector and customers.

According to the telecom operator, there are currently more than 3.5 million Kenyans who use mobile and internet banking services in the country every month.

African business executives pledge support for anti-graft war

by Naftali Mwaura NAIROBI (Xinhua) -- Business leaders from the Sub-Saharan African region on Tuesday renewed commitment to support the war against graft that is responsible for the loss of about 30 percent of the continent’s GDP.

The executives who attended the Africa Business Ethics Conference in Nairobi said they will rally behind government-led efforts to stamp out corruption which is to blame for stagnating economic growth and jeopardizing security and cohesion.

"Corruption is a threat to growth of businesses and continue to hamper efforts to address poverty and inequality in many African countries," said Lee Karuri, the Chair of Kenya Private Sector Alliance (KEPSA) Foundation.

"The private sector is therefore committed to assist governments root out graft through legislation and public awareness on the vice," he added.

Kenya is hosting a two-day Africa Business Ethics Conference attended by industry executives, policymakers, scholars and campaigners to discuss innovative ways of enhancing private sector participation in anti-graft war.

The conference that runs from June 25 to 26 has been organized by KEPSA Foundation through its Multi-sectoral Initiative Against Corruption (MSIAC) and Centre for International Private Enterprise (CIPE).

Lars Benson, CIPE Regional Director for Africa said that strong legislation combined with political goodwill and engagement of citizens is key to eradicate corruption in the world’s second largest continent.

"Africa must build strong democratic institutions, enforce the laws and engage the public in order to win the war against corruption," said Benson.

He said that eradicating corruption will stimulate growth of local enterprises while enhancing provision of critical services like education, health, water and social security to the population.

Fatma Elmaawy, chief executive officer of consultancy firm, Milestone Resources Solution, said that action on graft is key to sustainability of African indigenous enterprises.

"Corruption has stifled growth of Africa’s small and medium sized enterprises that provide bulk of new jobs and its eradication will have impacts on service delivery and security," said Elmaawy.

COMESA to prioritize sanitary and phytosanitary
investment to promote cross-border trade

by Ronald Njoroge NAIROBI (Xinhua) -- Common Market of Eastern and Southern Africa (COMESA) member states plan to prioritize sanitary and phytosanitary (SPS) investment to promote cross-border trade.

Thierry Mutombo, director for investment, promotion and private sector development at COMESA, said almost 70 percent of the reported non-tariff barriers in the region are constituted by technical standards and SPS measures.

"Investments in SPS capacity in COMESA are still very low both in the public and private sector, and most countries lack coherence in the establishment of SPS priorities and related investments," Mutombo said during a high-level meeting on SPS capacity-building.

To fully exploit the existing trade and market access opportunities, the trading bloc must address constraints to cross-border trade, Mutombo said.

He said evidence from analytical work and studies points to a number of causes of SPS-related non-tariff barriers, which undermine trade, industry competitiveness and market access.

"These include varied SPS standards and regulatory frameworks across member states, absence of good regulatory practice and common risk-based approaches to underpin legislation and regulations and import conditions required to ensure predictable, legitimate, harmonized SPS frameworks," Mutombo said.

According to the trading bloc, COMESA countries face SPS-capacity challenges like poor awareness on SPS obligations and responsibilities in the private and public sectors, and inadequate capacities to negotiate equivalence and mutual-recognition agreements for market access within the bloc.

Chris Kiptoo, permanent secretary at Kenya’s Ministry of Trade, Industry and Cooperatives, said the subject of SPS standards is a crucial element of Kenya’s trade policy.

"Compliance with SPS measures has opened tremendous export opportunities for Kenyan producers and exporters, both at the intra-regional trade level and at the international level," Kiptoo said.

He said Kenya has made tremendous strides in the formulation of plans, policies, laws, regulations, strategies and institutional frameworks that provide for protection of human, animal and plant life and health, which has enhanced the competitiveness of the country’s exports in the domestic, regional and international markets over the years.

National budgets occasionally do not have sufficient resources to address all national priorities and needs, which requires hard choices to be made between competing investments that may all be required to bring appreciable benefits in terms of export performance, agricultural productivity, environmental protection and public health in the longer term, Kiptoo said.

"Thus, cross-sectoral collaboration and prioritization of investments becomes important," he said.

"The diversity of strengths and weaknesses on the continent demands greater collaboration between countries that belong to the same free trade area."



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