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Kenya: Please Help Secure Our Shares
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The Nation (Nairobi)
10 May 2008
Posted to the web 12 May 2008
Philip Wahome
Nairobi
Hapless investors are now taking their stock market frustrations to annual general meetings in what is clearly lack of confidence with the current trends at the capital market.
In at least two AGMs in as many days, a number of investors have veered off their respective agendas to seek directions, if not help, over rogue stockbrokers meddling with their shares.
On Thursday during the AccessKenya AGM, a shareholder pleaded with the government and the Nairobi Stock Exchange to safeguard their shares on their Central Depository and Settlement (CDS) accounts.
"I hope the government and NSE officials are here so that they can help find a solution to safeguarding citizen's shares," said an investor at the AccessKenya meeting.
The Central Depository and Settlement Corporation (CDSC) is the custodian of all shares at the market. However, unscrupulous stockbrokers or their employees have been irregularly trading in client shares raising the current concerns.
In a span of one year, Francis Thuo & Partners and Nyaga Stockbrokers have collapsed dampening market confidence, which is vital in trading of securities.
During the Barclays Bank AGM, on Friday, a lady's question set the tempo as the meeting was discussing the bank's increase of its shareholding base, from 46,119 shareholders to 58,946 shareholders. "We are happy that the bank has more shareholders this year. But what happens to those shareholders whose shares were illegally sold by stockbrokers?" she posed.
Another, who only gave her name as Lydia, asked for the bank's help in eradicating illegal electronic trading of shares.
While responding, the bank's managing director, Mr Adan Mohamed appealed to the Capital Markets Authority to tighten the rules and apply harsher penalties for all those who operate illegally at the stock market.
Harsh penalties
"There should be tougher rules at the NSE and we should penalise existing players (incase they flout any rules)," he added.
Mr Mohamed sympathised with the shareholders' fate and referred them to the CMA.
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"All CDS matters are sanctioned by the CMA. Therefore, you can only forward all your complaints there," said Mr Mohamed.
In 2006, the bank split its shares and offered a bonus share issue thus raising them to 1.3 billion up from 203 million.
Barclays shareholders approved a final dividend of Sh1.15 per share, bringing the total dividend payout to Sh1.65 per share for 2007.
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