Bob Mathews: Obituary of a Reincarnated Broker

Bob Mathews Stockbrokers seems to have failed to learn from its past and has once again been suspended from trading at the NSE for 10 working days. A limited liability company, Bob was incorporated on 6th April 1994 and licensed by the Capital Markets Authority (CMA) on 1st July 1994 and become a full member of the Nairobi Stock Exchange (NSE) and Central Depository Agent (CDA) of the Central Depository and Settlement Corporation (CDSC). Due to liquidity problems Bob only managed to operate for one year before closing down (suspended) in 1995.

13 years later, in 2007, Bob Mathews (surprisingly) reopened its doors to the public in the middle of a bull-run. As tradition would have it the broker (among other five) was once again faced with liquidity problems a year later after failing to fulfill some very basic requirements for license renewal by the CMA. Bob was let off the suspension hook at the last minute. Fate has finally had its way and now the broker faces a threat of being permanently suspended from the NSE once again.

Open Letter to Micah Cheserem - CMA Chairman

Dear Mr. Cheserem,

First, I would like to congratulate you on being appointed to the Chair of the Capital Market Authority (CMA) of Kenya. Despite others approval, I personally I find it disturbing for a man of your caliber to head an institution that has been rendered powerless by cartels of market insiders. You have done ‘great’ thing before, but I’m afraid this is not the time or place to repeat history.

I have decided to detail in this open letter my uttermost disgust and fear of what our Nairobi Stocks Exchange (NSE) has become. I believe by doing this I address the concern of many NSE investors like me and touch on the principal causes of concern of each one of us.

Following the unfortunate turn of events at the stock market, two stockbrokerage firms have collapsed, one placed under statutory management and others left with questionable characters. In all this we investors have bared the brunt. And all we have received from the people we entrusted our hard earned money to is excuses, from the mundane ones like computer errors on the CDS statement to the Global financial crisis.

Is this thing we call NSE just another legal pyramid scheme where investors can loose their investments and no one is prosecuted? All we get is press statements from the concerned authorities (CMA & NSE) and promises of instituting tough regulations, while the perpetrators of the ‘crimes-against-investors’ go scot-free.

I would want to believe that you are more knowledgeable of the above details and much more that’s contained in the Nyaga-PWC audit that has been kept secret from us. Nevertheless, I would like you to do some drastic changes lest the NSE collapse before the end of this global financial crisis. Starting with demutualization of the NSE, reduction in family ownership in brokerage firms or just constitution of a parallel/new securities market.

If none of this can be done, then simply close down CDSC, outlaw all (remaining) brokers and revert to share certificate and open-out-cry method of trading. At least then I will trust that my shares are safe under my mattress.

I wish you well in your work to clean up this mess called the NSE.

Yours truly,

Kainvestor.

Business Daily Focus on Blogs

Kenya’s Business Daily has today produced a special report on the blogging culture in Kenya. As much as the pieces on blogging we interesting to read, I find the impression given in some articles about blogging to be utterly uninformed. Like this which says:

“If you are looking forward to entering into the business of blogging, please don’t. There was a time when it made millions, that is now gone….”

I don’t think in the 21st century anybody would get into blogging for the money – adsence or any other kind. There is no money in this blogging world, just some few pennies here and there that don’t count much. its all about what you love and expressing yourself unconstrained by rules. but either way one has to be careful with the kind of information you post.

And in Kenya, blogging is not a very serious information source to warrant a threat to the main stream media; not even with the fibre optic landing this June. But it’s still great that more and more corporate blogs will grace the Kenyan blogosphere soon.