Kenyans dominate securities sector - survey

Twist. The proposed EAC union is the next step after the common protocol that came into effect in 2010 and is still being implemented with a few legal bottlenecks slowing it.

Nairobi

Nearly a quarter of employees in Uganda’s stockbrokerage firms, fund managers, investment advisers and other industry licensees are Kenyans, a survey by Kenya’s capital markets regulator revealed recently.
The Capital Markets Authority (CMA) Uganda Capital Markets Survey 2011 dated June 2012, says Kenyans are the only other nationals from the region working in Uganda’s capital markets.

“Kenyans accounted for 23 per cent of the total employees in the industry with no citizens of the other member states of the East African Community being employed in the Ugandan capital markets industry,” says the survey.
The study looked at the size of Uganda’s capital markets, industry performance, the cost of doing business and the impact of the East Africa Community (EAC) on Uganda’s market players.

The survey says Kenya is showing the greatest enthusiasm in embracing the EAC (Kenya, Rwanda, Tanzania, Uganda and Burundi) target of having a single regional financial system and this impact is being felt in the workforce.

Ugandan employees account for 71 per cent of the remaining staff and the six per cent balance was from outside of Africa. PineBridge Investments country manager Nicholas Malaki, UAP Financial Services general manager Patrick Ndonye, Davis Gathara of Mbea Securities and CfC Stanbic Financial Service’s Consolata Mburu are some Kenyans in top positions at Ugandan financial service firms.

The survey says Kenya is taking advantage of the opportunities that the EAC has given birth to that include easy mobility of labour.

Slow activity
“Ugandan market players are yet to fully take advantage of the opportunities that come with the integration of the EAC capital markets. It is only Kenyan market players that are playing a leading role in other EAC capital markets,” says the survey. The Capital Markets Advisory Council, the CMA’s equivalent in Rwanda, is headed by Robert Mathu, who is a Kenyan.
Biggest buyers
The survey also found that Kenyans are also the biggest clients among EAC members.

East African domination
“A total of 1,005 clients representing 24 per cent of the total registered client base were from the East African region.
Majority of the clients from East Africa (99 per cent) were Kenyans. 150 East African clients were active with all being Kenyans,” says the survey.
Kenyan retail investors were some of the biggest buyers in the Stanbic Uganda initial public offer (IPO) of 2007 and the Umeme IPO which began on October 15 and closes on November 7 is also open to Kenyans and other East Africa nationals. Kenyan companies and their subsidiaries are also active in Uganda’s capital markets.

The survey found that 75 per cent of all market players were subsidiaries and out of these nearly half (45 per cent) are from Kenya-based parent companies.

Standard Investment Bank chief executive Job Kihumba said this was expected due to Kenya’s advantage of a more mature financial market than EAC peers.

“When the Dar-es-Salaam Stock Exchange started (1996) the NSE had to second their staff ,” said Mr Kihumba.
Kenya’s dominance in labour is however not guaranteed eternally since neighbouring countries becoming more competitive will inevitably lead to a change in the employment mix added Mr Kihumba.