Standard Investment Bank starts online forex trading
Saturday December 22 2018
Kenya’s Standard Investment Bank (SIB) has ventured into online forex trading as part of efforts to diversify its income streams, following the poor performance of its stock and bond trading.
“We will be giving our clients an alternative investment portfolio because other markets have been drying up,” said the firm’s chief executive, James Wangunyu. “This is an opportunity for local investors to participate in global markets.”
The firm received the online forex trading permit from the Capital Markets Authority last week.
As a money manager, the firm will choose and manage investments for its online forex trading clients and develop appropriate investment plans. It will also conduct financial analysis and monitor foreign exchange portfolio investments on behalf of its clients.
“SIB will also communicate clients’ buy and sell order positions through a licensed online forex trading broker, to meet their investment goals,” said CMA chief executive, Paul Muthaura.
Kenya has only two licensed market intermediaries —SIB and EGM Securities Ltd — to operate in the country’s forex trading space.
The country’s stockmarket has been on the decline, with 12 firms issuing profit warnings in 2017 compared with 11 in 2016.
This year, six firms have warned of an expected drop in earnings, including Kenya Power, Sanlam Kenya, Centum Investments Ltd, Bamburi Cement, Housing Finance and Sameer Africa.
Globally, the forex market is estimated to be a $5 trillion industry, providing a lucrative investment option for the operators.
In Kenya, an estimated 50,000 people, including brokers and money managers are involved in the business. However, it has been infiltrated by unscrupulous dealers, prompting regional central banks and capital market regulators to tighten regulations.