The Nairobi Securities Exchange (NSE) has announced the admission of Investcent Investment Bank as an Authorized Securities Dealer (ASD) in the fixed-income market. This move is part of a broader initiative by the NSE to reform Kenya’s bond market, with a focus on enhancing liquidity, transparency, and accessibility for investors. The move aims to strengthen the country’s fixed-income securities market, offering investors more opportunities to trade in bonds.
This development is a significant milestone for both the NSE and Investcent Investment Bank. The bank is now authorized to actively participate in bond trading on the NSE platform. This is expected to contribute to the deepening of Kenya’s bond market by providing more options for bond investments, an essential step in the continued growth of the country’s financial sector.
NSE Chief Executive Officer, Mr. Frank Mwiti, highlighted the importance of this step in improving the overall efficiency and liquidity of the NSE bond market. “The admission of Investcent Investment Bank as an Authorized Securities Dealer is a significant milestone in our journey to enhance the efficiency and liquidity of the NSE bond market.
By increasing the number of players in this space, we are expanding the range of options available to investors, enhancing price discovery and increasing market transparency. This move aligns with our strategic commitment to develop a more robust fixed-income market that meets the needs of issuers and investors,” Mwiti stated.
The admission of more dealers is expected to drive competition and bring greater transparency to the market, ultimately benefiting both investors and issuers. The fixed-income market, particularly bonds, has long been viewed as a key driver of long-term capital mobilization, and the NSE’s focus on bolstering this segment is aligned with its broader strategy to provide world-class trading infrastructure for local and international investors.
Investcent Investment Bank, a licensed boutique investment bank and alternative investments hedge fund manager, has expressed enthusiasm about its role in Kenya’s bond market. Dr. Peter Onyango, Co-Chief Executive Officer of Investcent, remarked.
“As a licensed boutique investment bank and alternative investments hedge fund manager in Kenya, Investcent will leverage this new partnership with the NSE to provide customized fixed-income solutions tailored to meet the specific needs of our clients. We aim to transform the bond market by delivering exceptional services while also contributing to the growth and expansion of the bond market in Kenya.”
This marks a critical point in the bank’s efforts to diversify its offerings and expand its market presence. With expertise in fund management, corporate advisory, capital raising, and project finance, Investcent is well-positioned to influence the fixed-income market’s growth and meet the evolving needs of its clients.
The admission of Investcent comes amid broader reforms that the NSE is implementing to strengthen Kenya’s financial market. This includes opening up bond trading to all licensed financial service providers under a hybrid bonds market framework, which was approved earlier this year by the Capital Markets Authority (CMA). The goal is to create a more inclusive market environment where more financial institutions can participate as dealers.
According to the NSE, several other financial institutions have submitted applications to become Authorized Securities Dealers, and the exchange plans to admit them once they fulfill the necessary criteria. This initiative is expected to increase competition and improve liquidity, making bond trading more accessible to a broader spectrum of investors.
Investcent’s experience in the financial sector, including managing pension funds and overseeing a Kenya Shilling Fund with assets under management (AUM) of KES 1.38 billion, makes it a strong addition to the bond market. Furthermore, the recent launch of its USD Fund, with an AUM of $4.9 million as of November 2023, highlights its growing influence and expertise in fund management.
The bank’s membership in key industry bodies, such as The Institute of Certified Investment and Financial Analysts (ICIFA) and The Association of Pension Trustees and Administrators of Kenya (APTAK), further underscores its commitment to adhering to the highest standards of financial management and governance.
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