Joseph Bonyo
9 November 2009
Nairobi — The KenGen public infrastructure bond lived up to its promise to become the first offer to trade on an automated system.
This followed the change of heart by the Capital Markets Authority which approved the system hours to the listing of the bond.
According to the power producer's managing director Eddy Njoroge, the concerns of the regulator were well addressed to allow the system to go into operation on Monday morning.
"We managed to address the few concerns that the CMA raised and agreed that some were not enough to stop the automated trading of the bonds," Mr Njoroge told journalists at the sides of the listing ceremony in Nairobi.
The bond attracted applications for Sh26.6 billion against a target of Sh15 billion.
However, the firm is exercising a greenshoe option of Sh10 billion that will see it absorb a total of Sh25 billion.
Prime Minister Raila Odinga and Finance minister Uhuru Kenyatta who attended the event at the Nairobi Stock Exchange, underscored the deepening of Kenya's debt capital market.
"The results clearly show that we can raise most of the funds needed to realise the goals of Vision 2030 through our own capital markets," said Mr Odinga.
The failure to trade through the ATS could have been a low point to the bond offer as it was one of its key selling points.
CMA chief executive Stella Kilonzo said that they approved the system after the issues they had raised were met.
The NSE, Central Depository Settlement Corporation and the Central Bank of Kenya were to be involved in the execution of the automated trading of the bonds.
Among the issues that the market regulator had raised were on service level agreement, trading procedures, project implementation, fee structure and the price list.
The authority had further noted that these requirements were to be endorsed by the various boards of directors before the system came to life.
On Monday there were claims that the system was not up to task.
"The system is hanging; it's not able to recognise some of the pricing features. We hope it can be sorted out soon," a broker told the Nation on condition of anonymity.
However, a statement from the NSE refuted the claims insisting that all was well.
"The ATS system for bonds is up and running without any issues. Indeed, there is a lot of interest in trading of the KenGen bond," read a statement from the bourse.
It said that the discrepancy arose from an original schedule, that caused confusion as it included Saturday which is not a trading day.
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