NATION RAISES RED FLAG ON NSE

[JAHAATWACH]

On Monday,February 12, 2008,Washington Gikunju of NMG reported that Nairobi Stock Exchange, under the stewardship of Jimnah Mbaru, is rolling out Sh100m rescue plan for Nyagah Stockbrokers.

According to Gikunju,Nyagah Stockbrokers — billed as Kenya’s biggest brokerage house by clientele base — has been in severe financial distress with the regulator(Capital Market Authority) weighing the possibility of suspending its operating licence.

Mr Mbaru justify the Sh100 million rescue package on ground that NSE wanted to “support investors who had bought shares through it.”

But the Editor of Daily Nation is not buying Mbaru's explanation and angrily raises the red flag with this hair-splitting opinion piece

What's with this broker?

"As much as Nairobi Stock Exchange chairman Jimnah Mbaru would want us to believe that things are ship-shape at the bourse, ominous signs are appearing on the horizon.Months after stockbroker Francis Thuo went under, the NSE has been forced to deny ‘‘speculation’’ that Nyaga Stockbrokers are in trouble. Obviously, allaying fears among investors is what a responsible chairman of a critical institution is expected to do.

But looking at the earlier crisis and how it was resolved, the public is unlikely to exude confidence just because Mr Mbaru wants them to.Francis Thuo Stockbrokers went belly-up with an estimated Sh122 million in client money. Despite the NSE compensating the losers, the public is still unclear what exactly transpired to occasion the loss.

It is clear from NSE and Capital Markets Authority rules that brokers should not touch clients’ cash — they are just intermediaries between two parties.But where is the report of what really happened at Francis Thuo? Should we not excuse the public for being jittery in view of this communication vacuum?

Mr Mbaru says the NSE has injected Sh100 million to safeguard customers’ interest at Nyaga, but it may take more than money to restore this confidence.Rumours of violations, like stockbrokers selling investors’ shares without authorisation or issuing bouncing cheques abound. We would want to know from Mr Mbaru whether this is happening, and if true, the measures being taken to cushion the public.

Coming at a time when the economy is in turmoil, the Nyaga saga might irreparably erode market confidence. It is time the NSE reformed its operations to regain that confidence. "
Source: Daily Nation,Nairobi, Feb 14,2008

References
www.bdafrica.com/index.php?option=com_content&task=view&id=5819&Itemid=5812
www.bdafrica.com/index.php?option=com_content&task=view&id=5808&Itemid=5854
www.bdafrica.com/index.php?option=com_content&task=view&id=5832&Itemid=5854
www.stockskenya.com/stkforumtopic.aspx?stk=0&top=83
allafrica.com/stories/printable/200802111938.html
www.nationmedia.com/dailynation/nmgcontententry.asp?category_id=24&newsid=116763

[politicalmaniac]

Same sh!t different day.
No aibu kabisa, the wanton disregard for ethics and fair play is inherent in these folks. They have to guard 'their own'.
This is the same money that is then used for political shenanigans

[insidious]

This regression had been predicted. Meanwhile, the 'Professor' at CBK is reading from a different script while CMA hemorrhages common sense. They all seem like stage managed puppets with a delusional puppet master at the cords.

Snap, I forgot, Kimunya is their guardian angel!

Again, NSE's success was primarily the perception of stability (stock-hyping) based on several scenarios. Mbaru's cronnies' technical analysis of predicting price changes by trusting kibaki to maintain the political status quo will cost investors billions; nabado! Is any one therefore surprised by what was at stake for these folks? Incidentally, thats insider trading and illegal in almost all Respected Stock Exchanges.

These men are just thugs-in-suits and so is their thug-in-chief.

[job]

indeed a red flag.

part of why kibaki hardliners like kimunya and mbaru dont want to share power with odm is precisely this.

the sudden exposition of fairy tales, inflated & manipuated stock values, conflicts of interest, insider trading, etc etc.

many investors, especially unsuspecting low-end speculators are indeed going to start facing the reality of heavy losses when the truths start coming out.

the same faces at nse are the same ones at cma and indeed the very same ones owning the stock trading brokerages......a scam of magnanimous proportions.

the fact is that jimnah mbaru and nse are infact not tying to protect investors who had bought shares through the nyagah brokerage.

mbaru is infact protecting the owners of nyagah brokerage who may have commited the crime of using investor funds to trade for quick returns. an illegal way to borrow interest-free loans without consent of investors.

all these dirty tricks may be rife at the bourse.

ironically, mbaru's actions may not forestall imminent panic in the stock market...but may infact fuel it. the mere fact this report was written in the first place says all may not be well.

scrutiny and oversight in this market is long ovedue. a tiny cabal cannot contol it and still be expected to regulate themselves.

job

[politicalmaniac]

Yep
And when the on goings on NSE were being questioned by R, they spit at him.

Its the ordinary investor who will suffer.