Capital Markets

The capital markets in Kenya have witnessed many years of sustained and rapid growth. This performance, phrased as one investor as “Africa in fifth gear”, reflects the broader macroeconomic fundamentals of the country’s economy, which is set to strengthen further in 2017 as a result of ongoing government spending on infrastructure and the recovery in tourism. However, short-term hurdles have dampened enthusiasm, such as the global uncertainty resulting from Brexit and the unexpected outcome of the US presidential elections in 2016, and domestic concerns over the national elections in August 2017. Still, while investors at the Nairobi Securities Exchange (NSE) may have been holding back investments to take account of short-term moves, excitement in Kenya’s long-term growth trend has not dimmed, as demonstrated by the ongoing activity in private equity and mergers and acquisitions. Despite the market’s relative sophistication, new initiatives are likely to require years of support by NSE and other market participants before they achieve a meaningful level of liquidity, particularly when spot equities and bonds are slowing down.

This chapter contains an interview with Paul Muthaura, CEO, Capital Markets Authority; and Geoffrey Gangla, CEO, Genghis Capital.