{"id":92565,"date":"2023-05-17T19:31:42","date_gmt":"2023-05-17T19:31:42","guid":{"rendered":"https:\/\/www.africa-press.net\/kenya\/all-news\/kenyas-corporate-bond-market-depressed-agency"},"modified":"2023-05-17T19:45:53","modified_gmt":"2023-05-17T19:45:53","slug":"kenyas-corporate-bond-market-depressed-agency","status":"publish","type":"post","link":"https:\/\/www.africa-press.net\/kenya\/all-news\/kenyas-corporate-bond-market-depressed-agency","title":{"rendered":"Kenya\u2019s corporate bond market depressed \u2013 agency"},"content":{"rendered":"

Africa-Press – Kenya. <\/strong><\/span>Private firms and major corporates are not tapping opportunities in Kenya\u2019s bond market, according to a financial markets agency. This, it says, notwithstanding huge opportunities mainly in climate-friendly investments.<\/p>\n

Financial Sector Deepening Africa (FSD Africa) cites readily available bank loans and avoidance of disclosures by private entities as the main drawbacks in issuance of corporate bonds<\/p>\n

A corporate bond is a fixed income instruments issued by a company in order to raise capital. The corporate bond market in Kenya enables companies\u2019 access long-term capital at competitive rates, enhancing their growth and development.<\/p>\n

Latest Nairobi Securities Exchange barometer shows bonds turnover recorded a 47.17 per cent decline in April, from Sh70.66 billion in March 2023, to Sh37.33 billion.<\/p>\n

In the first quarter of the year, turnover fell 14.9 percent year-on-year with investors trading bonds worth Sh162.51 billion in the period, down from Sh190.9 billion in the first quarter of last year. The Capital Markets Authority (CMA) has attributed the drop to slower economic growth, insufficient investment growth and macroeconomic instability.<\/p>\n

\u201cMost issuers don\u2019t want to disclose, because when you come to the market with a corporate bond, the idea is you get less stringent requirements but in exchange for that, you offer to become more transparent,\u201d director of capital markets Evans Osano said.<\/p>\n

He spoke during a around table in Nairobi on Wednesday which brought together capital market stakeholders including potential issuers in both banking and non-banking sectors, intermediaries, fund managers and other sector players.<\/p>\n

There have been little activities in the bond market in recent years despite their ability to raise long-term capital at affordable rates to fund growth.<\/p>\n

Corporate bonds are less risky and less volatile compared to other asset classes. Recent activities include the Kenya Mortgage Refinancing Company\u2019s seven-year tap issue and Kenya\u2019s first green bond by Acorn Holdings Limited.<\/p>\n

The Sh5.7 billion green bond programme, partially guaranteed by GuarantCo, was cross-listed on the International Securities Market (ISM) of the London Stock Exchange, and at the Nairobi Securities Exchange (NSE) in 2020.<\/p>\n

Others were East African Breweries five-year fixed-rate instrument floated in 2021 to repay debt with a maturity date of October 2026, Family Bank\u2019s five and a half-year bond floated on 2021, and Centum Investment\u2019s bond floated in 2020 with a maturity date of this December.<\/p>\n

\u201cThe process of going to the market, including approvals and listing is discouraging some of the potential issuers. We have to make the process as seamless and cost effective as possible so that it is not a barrier or excuse for not coming to the market,\u201d Osano said.<\/p>\n

Data analysis and financial expert Mihr Thakar however notes rising interest rates have lead to losses for existing bond holders. \u201cNew buyers from the secondary market will bid in a way that would result in losses for sellers of the older securities. A standoff between buyers and sellers results in lower bond turnover at exchange,\u201d Thakar told the Star yesterday.<\/p>\n

FSD Africa called for tapping into green investment bonds in the country saying they provide a huge opportunity. Some of the potential sectors include built environment, ICT, telecommunication, agriculture (climate smart), green manufacturing and carbon markets.<\/p>\n

Fund managers, who are said to be conservative, need to switch from looking at risk returns towards green opportunities, the agency notes. The outstanding corporate bonds in Kenya are 0.2 per cent of GDP, of which 99 per cent is from banks and a mere one per cent from corporate bonds.<\/p>\n

CMA has since committed to accelerate growth of the capital markets. \u201cThe Capital Markets Authority will continue to develop and enhance its regulations to support and accelerate the growth path of Kenya\u2019s capital market enhancing mobilization of domestic resources and international capital in Kenya through the NSE,\u201d chairman Nicholas Nesbitt notes.<\/p>\n

For More News And Analysis About Kenya<\/a> Follow Africa-Press<\/a><\/strong><\/p>\n","protected":false},"excerpt":{"rendered":"

Africa-Press – Kenya. Private firms and major corporates are not tapping opportunities in Kenya\u2019s bond market, according to a financial markets agency. This, it says, notwithstanding huge opportunities mainly in climate-friendly investments. Financial Sector Deepening Africa (FSD Africa) cites readily available bank loans and avoidance of disclosures by private entities as the main drawbacks in […]<\/p>\n","protected":false},"author":84,"featured_media":92564,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[2,5],"tags":[6857,7003,544],"class_list":["post-92565","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-all-news","category-economy","tag-africa-press","tag-africa-press-kenya","tag-kenya"],"yoast_head":"\nKenya\u2019s corporate bond market depressed \u2013 agency - kenya<\/title>\n<meta name=\"description\" content=\"Private firms and major corporates are not tapping opportunities in Kenya\u2019s bond market, according to a financial market ...\" \/>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.africa-press.net\/kenya\/all-news\/kenyas-corporate-bond-market-depressed-agency\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Kenya\u2019s corporate bond market depressed \u2013 agency\" \/>\n<meta property=\"og:description\" content=\"Private firms and major corporates are not tapping opportunities in Kenya\u2019s bond market, according to a financial market ...\" \/>\n<meta property=\"og:url\" content=\"https:\/\/www.africa-press.net\/kenya\/all-news\/kenyas-corporate-bond-market-depressed-agency\" \/>\n<meta property=\"og:site_name\" content=\"kenya\" \/>\n<meta property=\"article:publisher\" content=\"https:\/\/www.facebook.com\/AfricaPressTunisiaa\" \/>\n<meta property=\"article:published_time\" content=\"2023-05-17T19:31:42+00:00\" \/>\n<meta property=\"article:modified_time\" content=\"2023-05-17T19:45:53+00:00\" \/>\n<meta property=\"og:image\" content=\"https:\/\/static.africa-press.net\/kenya\/sites\/28\/2023\/05\/postQueueImg_1684335714.08.jpg\" \/>\n\t<meta property=\"og:image:width\" content=\"720\" \/>\n\t<meta property=\"og:image:height\" content=\"540\" \/>\n\t<meta property=\"og:image:type\" content=\"image\/jpeg\" \/>\n<meta name=\"author\" content=\"cfeditoren\" \/>\n<meta name=\"twitter:card\" content=\"summary_large_image\" \/>\n<meta name=\"twitter:label1\" content=\"Written by\" \/>\n\t<meta name=\"twitter:data1\" content=\"cfeditoren\" \/>\n\t<meta name=\"twitter:label2\" content=\"Est. reading time\" \/>\n\t<meta name=\"twitter:data2\" content=\"3 minutes\" \/>\n<script type=\"application\/ld+json\" class=\"yoast-schema-graph\">{\"@context\":\"https:\/\/schema.org\",\"@graph\":[{\"@type\":\"Article\",\"@id\":\"https:\/\/www.africa-press.net\/kenya\/all-news\/kenyas-corporate-bond-market-depressed-agency#article\",\"isPartOf\":{\"@id\":\"https:\/\/www.africa-press.net\/kenya\/all-news\/kenyas-corporate-bond-market-depressed-agency\"},\"author\":{\"name\":\"cfeditoren\",\"@id\":\"https:\/\/www.africa-press.net\/kenya\/#\/schema\/person\/068c7ab4e9634ae78ec5d54ec46598bb\"},\"headline\":\"Kenya\u2019s corporate bond market depressed \u2013 agency\",\"datePublished\":\"2023-05-17T19:31:42+00:00\",\"dateModified\":\"2023-05-17T19:45:53+00:00\",\"mainEntityOfPage\":{\"@id\":\"https:\/\/www.africa-press.net\/kenya\/all-news\/kenyas-corporate-bond-market-depressed-agency\"},\"wordCount\":641,\"commentCount\":0,\"image\":{\"@id\":\"https:\/\/www.africa-press.net\/kenya\/all-news\/kenyas-corporate-bond-market-depressed-agency#primaryimage\"},\"thumbnailUrl\":\"https:\/\/static.africa-press.net\/kenya\/sites\/28\/2023\/05\/postQueueImg_1684335714.08.jpg\",\"keywords\":[\"Africa Press\",\"Africa Press-Kenya\",\"Kenya\"],\"articleSection\":[\"all news\",\"economy\"],\"inLanguage\":\"en-US\",\"potentialAction\":[{\"@type\":\"CommentAction\",\"name\":\"Comment\",\"target\":[\"https:\/\/www.africa-press.net\/kenya\/all-news\/kenyas-corporate-bond-market-depressed-agency#respond\"]}]},{\"@type\":\"WebPage\",\"@id\":\"https:\/\/www.africa-press.net\/kenya\/all-news\/kenyas-corporate-bond-market-depressed-agency\",\"url\":\"https:\/\/www.africa-press.net\/kenya\/all-news\/kenyas-corporate-bond-market-depressed-agency\",\"name\":\"Kenya\u2019s corporate bond market depressed \u2013 agency - 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