Remarks by Mr. Paul Muthaura, Acting Chief Executive, during The Commencement of Trading of the New Diamond Trust Bank Shares at the Nairobi Securities Exchange on September 27, 2012
- The Chairman of Diamond Trust Bank;
- The Chairman and Board members of the Nairobi Securities Exchange present;
- The Group Chief Executive Officer and Managing Director of Diamond Trust Bank and Directors of Diamond Trust Bank present;
- The Chief Executive of the Nairobi Securities Exchange;
- The Chief Executive of the Central Depository and Settlement Corporation and Members of the CDSC board present
- Members of the transaction team
- Ladies and Gentlemen;
It is a pleasure to participate in the commencement of trading of the new Diamond Trust Bank shares at the Nairobi Securities Exchange. This rights issue is all the more notable given it was over subscribed by 86% thereby sending out a clear message of the confidence of shareholders and investors in general in Diamond Trust Bank and the capital markets as a whole.
This strong performance is very much in line with the company’s previous forays into the market in 2006 and 2007, when it raised Kshs 776 million and Kshs 1.6 billion respectively. Those two rights issues were oversubscribed by 98 percent and 76 percent, respectively.
It is noted that the capital raising in 2006 was instrumental in supporting the banks strategic shift evidenced by a significant branch expansion programme. Therefore, there is little doubt that the funds raised during the just concluded rights issue will be instrumental in fueling continued business growth and the execution of the Bank’s expansion plans.
The market as a whole greatly appreciates the DTBK and it's shareholders commitment to the use of the capital markets to raise funds since the company's initial listing in 1972 and we hope to see more entities emulating them in order to further enhance the vibrancy of our capital markets.
Having regard to the Government of Kenya's commitment to the integration of the EAC markets and the Authority's support for the regionalization of the financial markets, we are proud to support torch bearers like DTBK who have established operations in 4 of the 5 EAC markets including Burundi.
The Vision 2030 economic blue print for the Nation has clearly recognized the importance of not only the attainment of regional integration but the effective involvement of the Diaspora in funding the delivery of the Vision. In this light, the NationHella solution recently launched by DTBK serves as a critical tool to introduce greater efficiency and transparency in the handling of diaspora remittances and will also serve to assist in the more effective channeling of those remittances to productive economic activity.
Ladies and Gentlemen,
Allow me to reiterate the Authority's commitment to providing a facilitative environment for issuers, investors and/or market players to participate and thrive in the capital markets industry.
This commitment has informed our continued work on legal, regulatory, and institutional reforms designed to enhance issuer and investor confidence by benchmarking to international standards and also position the capital markets to play their pivotal role of mobilizing funds to meet the Vision 2030 objectives.
Some of the highlights of the reforms agenda include:
- The overhaul of the entire capital markets legal framework through drafting of the new Capital Markets Authority Bill, 2011 and the Securities and Investments Bill 2011 both of which have already been submitted to the Minister for Finance;
- The enactment of regulatory framework to guide the demutualization of the NSE;
- The introduction of a robust and proactive Risk Based Supervision regime by the Authority to guide the allocation of regulatory resources;
- The progress to date in promoting the creation and listing of Real Estate Investment Trusts (REITs).The regulations to facilitate this are in the final phase of development to pave way for their gazettement.
- I would also like to mention that we have made substantial progress towards the creation of a platform to list Small and Medium Enterprises (SMEs), the Growth and Enterprise Market Segment (GEMS), at the Nairobi Securities Exchange, working with the Exchange and the Central Depository and Settlement Corporation. The framework has been gazetted and the rules for registering Nominated Advisors (Nomads) approved. The NSE has also recently organized training for potential Nominated Advisors who will guide SME listing on the GEMS.
The Authority remains cognizant that investor confidence is a critical element of the further deepening of our capital markets. In this regard, we have recently rolled out two Rapid Results Initiatives seeking to:
- Strengthening investor confidence through the resolution of atleast 50% of the outstanding claims in respect of the compensation arising from Nyaga Stock Brokers and Discount Securities Limited; and
- Improve industry capacity through the implementation of a market intermediary certification programme targeting at least 50 market intermediaries both before the end of this calendar year.
In all events, on behalf of the Authority’s Board, Management and Staff and the entire capital markets fraternity, we wish the Diamond Trust Bank success in their business expansion plans.