President Mwai Kibaki has said the automation of the trading system in Kenya will create more confidence in the country's capital markets and enable the government and the private sector to access long-term financial resources for investment and development projects.
Kibaki noted that the automation of the trading system will make it easier for Kenyans and foreigners to invest through the stock exchange and increase the capacity of the markets to absorb larger issues.
President Kibaki was speaking Wednesday at the nation centre, Nairobi when he launched the automated trading system (ATS) of the Nairobi stock exchange.
Noting the launching of the system was a landmark achievement for the Nairobi stock exchange, President Kibaki said the automation of the trading system will position the Nairobi stock exchange to join the league of major stock exchanges in the world.
"I would also thank the Nairobi stock Exchange for being at the forefront in taking full advantage of the measures that my government has been taking to spur economic growth," he added.
The Head of State said the government will continue to manage the economy prudently in order to archive more growth and raise the standards of living of Kenyans, adding the improvements in the country's economy is a result of continued implementation of economic recovery measures.
He disclosed that following the success of the Kengen issue, the government has chosen the transaction advisors for the offer of 18 percent Government stake in Mumias Sugar Company and 40 per cent in Kenya Reinsurance Corporation.
Saying the process of restructuring Telkom Kenya is also well underway, President Kibaki noted that the government planned to sale 26 percent stake to a strategic investor, followed 34 percent stake to the public through the Nairobi stock exchange.
Said the President, "The resounding success of the initial public offers in recent times is a clear indication that Kenyans are now knowledgeable about the stock exchange. It is also evident that there are investment funds which can be quickly mobilized for development of critical sectors of our economy."
President Kibaki went on to say that Kenya has the potential of joining the ranks of the newly industrialized countries by raising the required financial resources from the capital market, and challenged the private sector to come forward and enjoy the advantages of being listed at the stock exchange.
Said the President, "Already, my government has put in place a series of measures to attract private businesses to raise capital through the stock exchange."
President Kibaki noted that the Nairobi stock exchange was a key institution in facilitating sustained economic growth, adding going by the current trends he had no doubt that the Nairobi stock exchange is equal to the task of facilitating a growth of 10 per cent per annum.
He however cautioned market players to observe ethics saying as the market records unprecedented growth, new challenges emerge among them lack of transparency and accountability which can undermine the market.
The President called on the Nairobi stock exchange to work hard to ensure that more companies list their shareholding, and urged the pension sector to invest the substantial pension funds at their disposal on the Nairobi stock exchange.
He observed that the stock exchange had provided an avenue for privatization, widening ownership of productive assets among Kenyans and a secondary market for treasury bonds.
"The Central Bank of Kenya, acting as agent of the government, has continued to use the stock market to issue treasury bonds to fund recurrent expenditure, lengthen the maturity profile of domestic debt as well as reduce government's reliance on short-term maturity treasury bills," he added.
On regional integration, the President noted with satisfaction that the automated trading system software being used by the Nairobi stock exchange and the central depositorty system software will soon be deployed by Uganda securities exchange and the Dar es Saalam stock exchange.
"This means that a regional securities exchange will be a reality," he added.
Other speakers included the Minister for Finance Amos Kimunya,the chairman of the Nairobi stock exchange Jimna Mbaru, the chairman of capital markets authority Chege Waruingi and the chief executive of the Nairobi stock exchange Chris Mwebesa.
Later, while addressing wananchi outside the Nation Centre, President Kibaki assured hawkers that the Government will build a market place for them at Muthurwa and Westlands in Nairobi where the hawkers can carry out their business.
He said that the Government was not against hawkers but wanted to ensure that their activities are conducted in an organized way and at designated areas.
"We cannot allow business to be conducted in a disorganized way in the Central Business District," President Kibaki said.
The President also called on wananchi to invest in local companies by buying shares and own part of the companies listed at the Nairobi Stock Exchange, adding that the buying of shares should not be viewed as a foreign idea.
