Archive for the 'Regulators' Category
October 12th, 2009 by Tom Minney
A bill to regulate the capital markets and collective investment schemes was tabled in the Rwandan Parliament last week. According to New Times newspaper, Trade and Commerce Minister Monique Nsanzabaganwa introduced the bill on 7 October.
She said a law is necessary before local companies begin full scale trading on the Rwanda securities exchange. Only companies that have embraced minimum corporate governance standards shall be allowed to be listed for trading and the law would create more investor confidence.
Rwanda currently operates as an Over-The-Counter (unregulated) market and the only share listed for trading is Kenya Commercial Bank shares, dual-listed with Nairobi and Dar Es Salaam stock exchanges and the Uganda Securities Exchange. Bonds are traded on a Rwanda bond market. However, the government plans to sell shares in some state-owned companies through the future Rwanda Stock Exchange.
The bill also proposes a Capital Markets Authority to replace the current Capital Markets Advisory Council (www.cmac.org.rw), which was established in 2007 and, in turn, set up the market. The future CMA would regulate securities exchanges and collective investment schemes, including mutual funds, unit trusts and contractual savings schemes.
Rwanda is already a member of the East African Securities Regulatory Authority. It is seeking to join the International Organization for Securities Commissions (www.iosco.org).
October 8th, 2009 by Tom Minney
Kenya’s Capital Markets Authority (www.cma.or.ke) is giving limited refunds to people who lost money with stockbroker Nyagah Securities which collapsed in 2008. It has also set up a telephone hotline for people to report suspect dealings by stockbrokers or investment banks.
Finance Minister Uhuru Kenyatta was reported in local press and on Reuters last month as saying the total payout will be KSh302 million (US$4.0 million) to over 25,000 shareholders who registered claims by August. It is the first payout from the Investor Compensation Funds (ICF), where payouts are limited to KSh50,000 ($666) per investor.
According to Kenya’s Daily Nation newspaper, remaining investors would only get full compensation if the Government gains KSh120 mln by selling the assets of top management of the failed stockbroker. The CMA is reported to have instituted judicial proceedings to sell property of Nyagah managing director Patrick Gakiavih.
However the newspaper also reported that a forensic report by PricewaterhouseCoopers suggested losses were KSh1.3 bln and criticized the role of the CMA for failing to act earlier on information.
More recently the CMA published hotline numbers in the local press to help people reach its anti-fraud unit. Chairman Micah Cheserem is reported as saying the authority is seeking to reduce fraud and protect investors by getting information promptly.
Two other stockbrokers – Francis Thuo and Discount Securities Limited –also folded in the last three years and the resulting lack of confidence saw Nairobi Stock Exchange (www.nse.co.ke) share prices sink fast. The CMA has been tightening reporting and compliance requirements in a bid to restore health in the capital market.
The compensation move may bring hope to investors who lost funds with Discount Securities Ltd, which is also under receivership.
September 24th, 2009 by Tom Minney
The brightest and best of Africa’s capital markets were highlighted in New York on 21 September at an awards dinner.
The Johannesburg Stock Exchange (www.jse.co.za) was recognized as Most Innovative African Stock Exchange, particularly for the Africa Board initiative. Best Performing Ai40 Company was Maroc Telecom (www.iam.ma). Co-operative Bank of Kenya (www.co-opbank.co.ke) won Best African IPO. The Capital Market Authority of Egypt (www.cma.gov.eg) took gold, winning the Most Innovative Capital Markets Regulator and Standard Bank Group (www.standardbank.co.za) took both the Best Africa Investment Bank and Best Africa Research Team Awards.
Kenyan and South African business leaders dominated the CEO categories, as James Mwangi (www.equitybank.co.ke) scooping the Ai100 CEO of the Year and Jacko Maree (www.standardbank.co.za) the Ai40 CEO of the year. Hussein Manzi, CEO, Bamburi Cement in Kenya (www.bamburicement.com) won the AiSRI50 CEO of the Year award and South Africa’s Phuthuma Nhleko, CEO, MTN Group (www.mtn.com) awarded the AiSRI30 CEO of the Year.
Africa investor (Ai) (www.africa-investor.com/), a leading international investment research and communication group announced the 2009 Africa investor Index Series awards jointly with the New York Stock Exchange (www.nyse.com), the world’s largest exchange.
Three winners were presented for each category with a winner, first runner-up and second runner-up, based on performance between April 2008 and April 2009. The awards, based on the Ai100 and Ai40 indices, are reportedly the only international, pan-African awards that recognize institutional investors, stock exchanges, stockbrokers and capital market regulators across the continent.
Raila Odinga, Prime Minister of Kenya opened the awards and praised them for showcasing African investment leaders and opportunities to the world. Over 200 senior executives from Africa and the world attended, including CEOs of the Nigerian, Mauritian, Egyptian, Casablanca and Ghanaian Stock Exchanges, as well as leading financial institutions such as the African Development Bank, Overseas Private Investment Corporation (OPIC), Afrexim Bank, Bank of New York Mellon and Scipion Capital.
Hubert Danso, Vice Chairman of Africa investor, also part of the judging panel, said: “The Awards record performance from April 2008 to 2009, which represents one of the most challenging investment periods in economic history. These Awards go a long way to highlighting the enormous potential and opportunities offered by Africa’s capital markets.”
Dr Tukur, Chairman of the NEPAD Business Group and Africa investor remarked: “Regarded as Africa’s Fortune 500, these awards are a tribute not only to those nominated or the winners, but all the actors in Africa’s capital markets community enabling us to have remarkable success stories to showcase to the world.”
The 2009 Africa investor Index Series Awards will be in the November-December issue of Africa investor magazine (published in English and Chinese). Supporters were NYSE Euronext, Thomson Reuters, the African Development Bank, CNN International, the NEPAD Business Group and the New Partnership for Africa’s Development (NEPAD).
September 24th, 2009 by Tom Minney
(based on April 2008-April 2009):
Most innovative African Stock Exchange
Johannesburg Stock Exchange (JSE) (winner)
The Egyptian Stock Exchange (EGX) (1st runner-up)
Stock Exchange of Mauritius (SME) (2nd runner-up)
Casablanca Stock Exchange (CSE) (2nd runner-up)
Best African Investment Bank
Standard Bank South Africa (winner)
ABSA Capital – South Africa (1st runner-up)
Banco Africano de Investimentos (BAI) – Angola (2nd runner-up)
Best African Research Team
Standard Bank – South Africa (winner)
Renaissance Capital – United Kingdom (1st runner-up)
UBA Capital – Europe (2nd runner-up)
Most Innovative Capital Markets Regulator
Capital Market Authority Egypt (winner)
Morocco Capital Market Authority (1st runner-up)
Financial Services Board of SA (2nd runner-up)
Best Performing Broker in Africa
BJM Securities – South Africa (winner)
Auerbach Grayson & Company – NY (1st runner-up)
EFG Hermes – Egypt (2nd runner-up)
Best African Fund Manager
Investec Asset Management – SA (winner)
Coronation Fund Managers – SA (1st runner-up)
EFG Hermes – Egypt (2nd runner-up)
Best African IPO
Co-operative Bank – Kenya (winner)
Poulina Group Holdings (1st runner-up)
UT Financials Services – Ghana (2nd runner-up)
Best Performing Ai 100 Company
Equity Bank – Kenya (winner)
Press Corporation – Malawi (1st runner-up)
Namibian Breweries – Namibia (2nd runner-up)
Best Performing Ai 40 Company
Maroc Telecom – Morocco (winner)
State Bank Mauritius (1st runner-up)
Barclays Bank of Kenya (2nd runner-up)
Most Innovative Ai SRI 50 Company
Bamburi Cement – Kenya (winner)
Guaranty Trust Bank – Nigeria (1st runner-up)
Kenya Airways (2nd runner-up)
Most Innovative SRI 30 Company
MTN Group – South Africa (winner)
Safaricom – Kenya (1st runner-up)
Mauritius Commercial Bank (2nd runner-up)
Ai 100 CEO of the Year
James Mwangi – Equity Bank (winner)
Olutayo Aderinokun – Guaranty Trust Bank (1st runner-up)
Francis Atuche – Bank PHB (2nd runner-up)
Ai 40 CEO of the Year
Jacko Maree – Standard Bank (winner)
Mohamed El Kettani – Attijariwafa Bank (1st runner-up)
Adan Mohamed – Barclays Bank (2nd runner-up)
Ai SRI 50 CEO of the Year
Hussein Manzi – Bamburi Cement (winner)
Olutayo Aderinokun – Guaranty Trust Bank (1st runner-up)
Hassan Kabanni – Mobinil (2nd runner-up)
Ai SRI 30 CEO of the Year
Phuthuma Nhleko – MTN Group (winner)
Mohamed El Kettani – Attijariwafa Bank (1st runner-up)
Naguib Sawaris – Orascom Telecom (2nd runner-up)
Best Performance by an African/South African Hedge Fund
Kadd Capital – SA (winner)
Fairtree Capital – South Africa (1st runner-up)
Scipion Capital – London (2nd runner-up)
September 16th, 2009 by Tom Minney
Regulators and players in the Nigerian capital markets hope recent actions against five banks will restore confidence in the market, but it looks as if the storm is not yet over. The Securities and Exchange Commission (SEC) has indicated that investigations continue into securities trading firms, after the Central Bank of Nigeria (CBN) sacked the chief executives and executive directors of five banks and briefly suspended trading in their shares in a bid to avoid a banking crisis.
As the CBN Governor Sanusi Lamido Sanusi and five appointed replacement bank directors visited the Nigerian Stock Exchange (NSE) on 16 September, the overall index stood at around 21,090 and market capitalization was N4,843 billion (US$31.5 billion), down 18.5% from 25,865 (index) and N5,887 billion (market capitalization) at the start of August. Market capitalization was reportedly N12 trillion ($78 billion) last year. Liquidity was also down as the banking sector is a key part of market activity.
According to the Daily Trust newspaper, acting SEC Director General Daisy Ekineh told journalists last weekend that current reforms in the banking sector will help strengthen confidence in the market:: “I am confident that the market will recover ultimately. What the market actually wants is confidence and once this is assured it will ultimately return back. What is happening in the banks will ultimately strengthen confidence in the market.”
On 9 September, Farida Waziri, chair of the Economic and Financial Crimes Commission (EFCC), represented by Bala Sanga, her principal staff assistant, was reported by This Day newspaper to have said in a presentation – titled “Barbarians within the Gates: The EFCC, Criminal Loans And Tax Evasion” – that the crash in share prices on the NSE was not linked to the global financial meltdown but by the high level of insider trading and other malpractices perpetrated by some stockbrokers, a few boardroom criminals and other collaborators.
The clean up was a joint effort of an investigating team comprising the SEC, the EFCC, the CBN and Nigeria Deposit Insurance Corporation (NDIC). Ekineh was reported to say the SEC had been instrumental in probing capital market transactions linked to the investigations are were still busy with on-site target inspection of registered market entities in different parts of the country “to ascertain the state of health of firms operating in the capital market”, following up returns that firms normally submit to the Commission.
On 14 August the CBN fired the management and later suspended trading in the shares of Union Bank, Intercontinental Bank, Finbank, Afribank, and Oceanic Bank. Ndi Okereke-Onyiuke, NSE Director General, said the suspension was to protect investors and prevent an unprecedented dumping of the shares of the five banks. The suspension was lifted on September 2, 2009 but led to more sellers than buyers of the banks’ shares. The CBN also injected a massive N420 bn into the banks, although the Vanguard newspaper reported that only N100 bn was used.
The SEC also investigated Okereke-Onyiuke, according to news reports, but cleared her. SEC’s Ekineh is reported as stating: “All the issues we raised have been addressed by her and we are satisfied by her response.. and she responded in good time.”
However, Ekineh warned that recovery in confidence and share prices may take some time.
August 4th, 2009 by Tom Minney
Kenya’s Capital Markets Authority is putting new regulations into law by the end of August, including tighter controls on stockbrokers and investment banks.
According to reports, the new rules set minimum share capital for stockbrokers at KSh. 50 million ($650,000) from the current KSh 5 mln, and investment banks at KShs 250 million ($3.25 million). They also require brokers to use International Financial Reporting Standards. Brokers and banks will publish annual audited accounts and half yearly unaudited accounts in at least two daily newspapers with a nationwide circulation, and they require professional indemnity insurance.
The deadline for accounts is three months after the end of June and December.
Kenya has asked consultants to bid to offer advisory services to the CMA as it tightens the regulatory regime. The authority is changing its regulatory framework through licensing, emphasizing compliance during applications for licences at the beginning of the each year. The regulator will manage risks through classifying stockbrokers and investment banks according to the strength of their financial position, the expertise of the management and their market exposure in products and client base. It will use this to focus its efforts on firms that are ranked risky.
Stockbrokers and investment banks are likely to restructure their boardrooms and upgrade their management, says The Nation newspaper. Individuals who own more than 25% of a brokerage or investment company will not be allowed to hold any management position.
The stock market is currently recovering from a collapse which was partly linked to a fall in investor confidence after losing money to collapsing stockbrokers, including three who have closed due to poor management and fraud. The CMA aims to restore confidence.
The regulator aims also to create more transparency in collective investments such as unit trusts and pension funds and is increasing its drive for public awareness.
August 4th, 2009 by Tom Minney
A Regional Capital Markets Conference for Africa is to be held next month under the theme: “Towards effective regulation and development of an efficient capital markets in Africa”. The conference is sponsored by hosted by Ghana’s Securities and Exchange Commission (SEC) and sponsored by the US Agency for International Development and the US SEC.
The agenda includes current capital markets development issues in Africa, including regulatory issues since the financial crisis. The meeting will be in Accra, Ghana, from 14-18 September. Regulators from insurance, banking, and securities are expected, as well as experts from Uganda, Cameroon, South Africa, Ethiopia, Ghana, Nigeria, US, UK and other parts of the world.
A key speaker is Dr Eleni Z. Gabre-Madhin, CEO of the Ethiopian Commodity Exchange on ‘Commodities Sector in Africa: Opportunities and challenges of developing a viable commodities market in Africa”. Another will be Dr Robert M. Fisher, assistant director in the US SEC’s Office of International Affairs on “Challenges of securities regulation in emerging markets”.
Ghana’s SEC will also host Middle East and African Regulators in a conference due in 2010, while the Ghana Stock exchange hosted the 11th African Securities Exchange Association (ASEA) conference in 2007 for the theme: “African Capital Markets: The next investment frontier”.