The Capital Markets Authority has revealed that fund managers lost billions to the Chase Bank and Imperial bank bond suspensions and Nakumatt’s default.
With Athi River Mining (ARM) reportedly also defaulting on their bond the list of companies that are losing money to defaulting corporates is growing.
CMA 2018 study shows that prolonged political uncertainty in Kenya, on the back of challenges of heavy investment by fund managers on Chase Bank and Imperial Bank bond offerings and their subsequent lock-in following their placement under statutory management caused a dim in funds under management.
Further, commercial papers issued by Nakumatt and Athi River Mining Cement Company both of whom have faced challenging financial times in the recent past was another asset class adversely affected the market.
Britam collective investment firm shrunk 14.5 percent from Sh9.3 billion to Sh8 billion between 2016 and 2017
Equity Investment Bank Money Market Fund’s collective investment fund shrunk 57.2 percent from Sh2.9 billion to Sh1.2 billion between 2016 and 2017
Madison Insurance collective investment fund shrunk 10.5 percent from Sh888 million to Sh794 million between 2016 and 2017
Genghis Capital’s collective investment fund shrunk 22 percent from Sh7000 million to Sh545 million between 2016 and 2017
Assets under Management (AUM) in the CIS market have been registering significant positive growth, from Sh20 billion in 2013 to Sh57 billion as of the end of December 2017, with money market funds the most popular asset class among fund managers, accounting for an average of 78 percent of the total value of portfolios.