The CMA, NSE & CBK makes is difficult for firms to raise bonds... Yes, there should be due diligence but let there be flexibility in the types (seniority) of bonds.

If firms could raise bonds on the 'cheap' they would prefer them to Bank loans. Issuing a bond os very expensive for the firms...

I would rather buy a Kakuzi Bond @ 10% (Kakuzi probably pays 15% to banks) than a bank CD at 5%... Why? The 5% 'extra'... I already have GoK Bonds... Coz they pay better than banks!
Kakuzi gets the cash at 5% discount (less fees+admin)...

BTW... coz of (many) folks like me... banks cant lend cheap! I want the highest interest they pay or I go elsewhere...

@Chali & cnn. It is reserves and capital that limit how much a bank can lend...not customer deposits. The last time you took a loan how were the funds disbursed? Bank Transfer? Bankers Cheque? And what are they drawn on? A Deposit A/c. Clearly it wud be difficult to claim that Banks made their loan from your savings account becoz your savings account balance never changes (just check at your ATM statement every 5 minutes, it's always the same figure you left). The banks have no money, all they do is create deposits (create credit).

So if a bank can make a loan (to govt or private) which results in the creation on a deposit (on which a check can be drawn) then aren't assets and liabilities growing respectively? Why banks need to attract customer deposits is becoz some of the loans written are made to customers who bank with another bank resulting in a transfer of funds...since banks lend to each other everyday at the end of the day all they do is transfer the net amount of these funds.

But the fact is that when you go to a bank for the first time as a new customer and take a loan they create a deposit account for you, that is the accounting entry.

@mzazil - I believe in it... I am a huge Warren Buffett fan... Get a pair of (fake) sunglasses... 200/- from the street vendor...

Would SCBK be interested in a brokerage licence to trade bonds at the NSE...methinks definately. And what's easier than poaching major bond traders from the investment banking community. Why are they squeezing out the middleman?

vvs

u must use a middleman to trade bonds in kenya..unless offcourse ur the said middleman

@ mzazii, there is someone who posts in a very bright/ Luminous blue, really burns my eyes especially on the small mobile screen.

why does the cma has to regulate the mkt? what value does cma oversite add? how many spurios trades has cma flagd? how many instances of unethical practic has cma unearthed??? let the market regulate itself...otc markets are very powerful at this

kizee. I gather you don't have much faith in CMA, but have a lot of faith in our honest bond traders. So if 80% of the secondary bond trading is controlled by 5 players, they can regulate themselves effectively? So how will they do this, through some sort of OTC bond association? How do other otc markets you know regulate themselves without govt oversight?

lemme add that the fx market is OTC and it self regulates albeit with some intervention of the dealers association

banks in kenya are funded by taxpayers? i think ur confused there my man...the free market is the best mechanism for mkt regulation...bar none! the otc bond mkt wud self regulate but the mkt players wud correct any malfeasances...i wud def introduce short sellin y not? theres a HRT mkt wat wud be the risk? short sellin creates liquidity...wat happens if ur tradin bonds and the int rates rise? u cant really trade can u? unless u can short...btw are u aware how much cma wants to charge banks for the license?