The market has declined, going by performance indicators since the beginning of the year.
Market performance and the general economy this year have been impacted by the political environment, especially since September. The market saw a decline in daily turnover in the month of October, resulting in reduced investor participation owing to the prevailing anxiety. We are optimistic that once we complete the election cycle, the market will recover and stabilise. The fundamentals of all the listed companies remain strong and they still provide a good buying opportunity.
A report by the Capital Markets Authority shows that foreign investor activity has dropped significantly with net outflows as high as $111 million. What are the NSE and CMA doing about this?
Traditionally, foreign investors reduce their activity during political seasons. In the beginning of the year, they accounted for an average of 70 per cent of market activity. However, the elevated political risk has led to the low level of participation, especially in October. At the NSE, were are delivering on our promise of new products, enhancing trading efficiency and promoting the market to retain our attractiveness.
The Growth Enterprise Market Segment (GEMS) has been registering poor returns for investors. Does the segment criteria need to be raised?
The segment criteria were tailormade to suit small and medium sized firms. We will maintain them as to the objective is to attract such companies to take advantage of the vast opportunities on offer. GEMS also offers an entry point for large companies who intend to list but cannot meet some of the eligibility requirements of the other segments.
The M-Akiba sale eventually failed despite success in the initial stage. Why?
On the contrary, M-Akiba did well given the impact it has in building awareness and a number of new accounts were opened. This being a first in the world, we consider it a success given that we attained a maximum subscription in the first issue and a fair subscription in the second issue. Given the right promotion and timing, the product will flourish.
Are we going see an extension of retail M-Akiba to other government bonds?
Yes, M-Akiba is a programme just like any other government bond. Its uniqueness is in its structure.
Counties continue to struggle as they depend on the government for funds. Should we expect county bonds any time soon?
We are in discussions with the counties and have been sensitising them on the benefits of issuing bonds including Green Bonds.