Economic experts are faulting a proposal by the capital markets regulator to allow foreigners to own 100 per cent of shares in companies listed on the bourse.
Lifting the cap on listed firms, which is currently at 75 per cent, the experts note, will not only expose
"After the 2007/2008 financial crisis, there was the recognition even by the
Dr Radha says making the stock market to attract huge capital inflows can be useful in good times but can quickly lead to liquidity crises during economic turmoil.
Imposition of a limit on foreign ownership, she said, was meant to encourage local ownership, given that the equities market provides a good alternative investment vehicle for middle class Kenyans. 10-year master plan
In its 10-year master plan, the
The regulator argues that the rule should be changed to "remove the blanket ownership ceiling which can unnecessarily inhibit foreign investment."
The authority is to spearhead the law review, which it terms "important" and should be carried out in the medium term.
This is part of an attempt to make
It is also expected to upgrade
"The reason for suggesting this change is that the 75 per cent ceiling has an impact on liquidity of certain stocks and this is likely to be exacerbated as foreigners continue to increase their investment in the Kenyan market," said CMA.
During her recent tour of
She, however, noted that as financial health in developed countries normalise, the risk of heightened volatility may give rise to new challenges in emerging market economies.
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