Kenya’s capital markets industry jointly said on Friday that it has established a “Capital Markets COVID-19 Fund’’ to support efforts at the national level through the Covid-19 Emergency Response Fund.
This is one of the measures designed to mitigate disruption in capital markets by ensuring that the trading and settlement systems continue functioning to support transactions.
The fund shall consist of contributions from Capital Markets Authority (CMA), Nairobi Securities Exchange (NSE), Central Depository and Settlement Corporation (CDSC), entities licensed/approved by CMA and listed companies and other issuers of securities.
“The contribution will be announced once the industry players have confirmed the level of support,” said CMA Acting Chief Executive, Mr. Wyckliffe Shamiah.
The principal object of Covid-19 Emergency Response Fund is to mobilize resources for an emergency response towards containing the spread, effects, and impact of the COVID-19 Pandemic.
President Uhuru had called upon all Kenyans, Corporate Entities both domestic and multinational, as well as our international development partners to support the national initiative.
NSE chief executive Geoffrey Odundo said the business continuity plan of the Exchange has been operationalized to support online and mobile trading with a URL available on NSE’s website.
“The industry is also encouraging local firms capable and approved by the Ministry of Health to produce supplies required to combat the Covid-19 pandemic to raise capital through the NSE including Ibuka, with some of the compliance requirements eased for them by the CMA,” he said.
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According to the industry players exit by some foreign investors from the market has created an opportunity for local retail and institutional investors to take advantage of the undervalued shares of listed companies.
Domestic institutional investors such as Pension Schemes, Collective Investment Schemes and Insurance Companies with a long-term investment horizon are encouraged to invest in blue-chip listed companies during this period subject to existing limits on asset class investments set out by their respective regulators.
The equities market at the Nairobi bourse has maintained a bearish trend ending the month of March lower as foreigners continued to exit. Over the month of March, the NSE-20, NSE-25 and NASI indices closed 17.94%, 18.21% and 14.33% lower.
