Capital Markets Authority (CMA) wants National Treasury to screen and identify the pipeline of projects it intends to fund with the first sovereign green bond, which it plans to issue next month.

Speaking during the launch of 13th edition of the Capital Markets Soundness Report (CMSR), Luke Ombara, Director, Regulatory Policy and Strategy at CMA, said to jump-start the overall primary debt capital markets the government needs to reconsider providing or endorsing guarantees for similar products.

Ombara urged Treasury to undertake proper screening and identification of projects in pipeline to be funded by the sovereign bond, if the country is to attract foreign capital from some of the world’s largest pension funds and asset managers.

He said CMA has outlined several measures it hopes to undertake to strengthen its operations in 2020.

Market cap

So far, he added, only top five companies by market cap have continued to dominate Kenya’s capital markets landscape thereby posing a market concentration risk.

Ombara said CMA wants to diversify the number and quality of listed entities at the bourse as well as adopting a strategy aimed at attracting other big industry players to consider listing on the exchange to dilute the dominance. 

Anne Nalo, CMA Product Development Officer said the Nairobi Securities Exchange is considering increasing the number of single stock futures traded to forestall the dominance.