•Wednesday, November 19, 2008
I have just heard in the news that Chris Mwebesa, the Nairobi Stock Exchange CEO has tendered his resignation. It will be good to know the reasons for his resignation at a time when the Nairobi Stock Exchange is facing a lot of problems with consistently falling prices and confidence levels.Was he pushed out or has he become incompetent in a bear market? Maybe he was just a stooge of former chairman Jimnah Mbaru, of Dyer and Blair, and this is a positional realignment paving way for a sympathizer of the new chairman, James Wangunyu of Standard Investment Bank.
This comes a day after Cooperative Bank announced that its preliminary IPO results that showed that there was a 70% subscription rate. This is the first failed IPO, that is, undersubscribed since 2005 Kengen debut. Calls to push this IPO to 2009 when a possible market recovery is expected were ignored by the lead transaction adviser, Dyer and Blair.
With the deteriorating global market conditions, fall of brokerage firms and the aftermath of the Safaricom IPO the NSE is yet to recover from gloom. For the once vibrant stock exchange, the fraudulent dealings by the brokers and price manipulations do not augur well for stock investors either. In a period of less than five months the NSE 20 share index, the barometer of share price movements, has dropped from over 5,000 points to the 3,000 range.
I have a feeling Kenya has not yet felt the heat of the global economic collapse and one wonders what will happen to the stock exchange and the Kenya economy at large when it does.
The CMA has overseen the collapse of Francis Thuo, Nyaga Stockbrokers and near-collapse of Discount Securities and I wonder if the Capital Markets Authority is the body to oversee Kenya's financial markets. I think it should be disbanded and the oversight role be given to the Central Bank of Kenya which is more versatile in regulation enforcement and fraud monitoring and investigations.
This is the best time to overhaul market regulations when the interest is diminishing and there is low transaction volume such that when there will be a boom, the market will be more efficient.
Update November 20 2008
Peter Mwangi, former Centum (formerly ICDCI) CEO is the new Nairobi Stock Exchange CEO.
Business as usual!
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