sent by Gordon Teti

ODM PRESIDENTIAL CANDIDATE RE-ASSURES INVESTORS AT THE NAIROBI STOCK EXCHANGE

Raila moves to calm the markets

Written by Geoffery Irungu  

October 16 2007: ODM presidential candidate Raila Odinga yesterday moved to assure investors at the Nairobi Stock Exchange and the business community that he would pursue policies that promote growth  and equity if elected president.

In a hastily organized visit to the Nairobi bourse, NSE vice-chairman James Wangunyu said the market has been losing an average of Sh5 billion a day in recent weeks and that Mr Odinga “stands accused” of contributing to the meltdown.

Mr Odinga said he would seek to have at least 200 companies listed at the NSE, a significant improvement of the 55 companies that are currently in the market.

Until the recent wave of initial public offerings (IPOs) in mid 2006, the market between only 51 listed firms.

Mr Odinga said his remarks about the NSE being used for money laundering and insider trading had been quoted out of context stressing that he stood for transparency in shares trading.

In November 2006, Mr Odinga was reported to have accused the NSE of being a market for laundering drug money - remarks that drew the ire of investors and NSE board.

During his visit to the NSE yesterday, the Langata MP said he stood for a stronger Capital Markets Authority (CMA) to better regulation of the market.

Mr Odinga was however received at the bourse by only three out of the 11 NSE directors. Apart from Mr Wangunyu, other board members present included Faida Securities managing director Bob Karina, and the NSE CEO Chris Mwebesa.

 “You stand accused. Shareholders’ wealth is being eroded every day. If this continues, by December investors shall all be like the church mouse - paupers,” Mr Wangunyu told Mr Odinga

He said that the market perceived Mr Odinga as being the president having reacted sharply to the opinion polls which showed the politician was leading among the top three presidential contenders.

“Investors want to know: are you a communist, a socialist or a capitalist?” asked Mr Wangunyu.

The ODM presidential aspirant said he not only stood for expansion of the national wealth but also for its access by the citizenry in an equitable manner.

In this he termed devolution as the best way to assure it, but stressed that it did not involve citizens being evicted from certain areas or their wealth being grabbed.

Stakeholders interviewed by Business Daily indicated that the move by the presidential aspirant was reassuring to investors.

“His address is critical to reassure the market. The market had panicked after the opinion polls showed Raila was leading,” said Job Kihumba, executive director at Standard Investment Bank.

Mr Kihumba said it would be further important for presidential aspirants or their representatives to participate in a televised programme about the stock market - considered to be a barometer of economic performance and future expectations.

Boaz Awitti, managing director of Bob Mathews Stockbrokers, told Business Daily that the address by the presidential aspirant would “re-assure the market significantly.”

Mr Odinga said that he did not consider himself to be on the dock over claims he is reported to have made against the stock market but that he wanted the see improvement in its supervision .

He said it was that remarks by minister Amos Kimunya that the stock market had made a loss of Sh200 billion was erroneous. “Ministers should not make remarks that cause investor panic,” Mr Odinga said.

He said he knew the inefficiencies of the communist ideology having spent several years in East Germany - which practiced communism till the 1989 collapse of the Berlin Wall that separated it from capitalist-leaning West Germany.

He said that devolution was about equitable use of resources through greater access saying the laissez-faire economic model - which allows unmitigated operation of market forces - had led to a situation of “everyone for himself and God for us all.”

The Langata MP said his government would provide more opportunities for business stressing that sectors such as information and communication technology (ICT) and building infrastructure had potential to provide even more jobs as opposed to concentrating on a few other sectors.

Early this year, NSE denied reports attributed to Mr Odinga that the rush for shares at the stock market was driven by narcotics funds and money laundering, stressing that it was a result of growth in incomes and pensions funds.

At the time, NSE chairman said that improved economic growth in recent years and the reduction of financial burdens on families by the introduction of free primary education has left Kenyans with more disposable incomes to invest.

He maintained that renewed business confidence brought about by swelling profits has seen companies attract investors who are out to benefit and this is expected to continue as long as there is economic growth.

Said Mr Mbaru: “The factors driving the economy include renewed business confidence by domestic and regional investors, resulting from improvements in the domestic and regional environment.”
 
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Source: http://www.bdafrica.com/index.php?option=com_content&task=view&id=3674&Itemid=5812
 
Business Daily;
  [NAIROBI]
Monday October 15, 2007 (Nairobi)

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Photo by: Frederick Onyango
ODM presidential candidate Raila Odinga (left) shares a light moment with  journalists as he introduces his daughter- in- law Veronica Wanjiru Ng’ang’a as her uncle, NSE vice-chairman James Wangunyu (in stripped tie) looks on. Raila,  who also introduced his son, Fidel Castro Odinga, has been on a charm offensive in the media to soften his public image.