CMA, NSE Pen Deal to Promote Financing of Infrastructure Projects Through Capital Markets – Tuko.co.ke
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Capital Markets Authority (CMA) has signed a Memorandum of Understanding with key partners to support the financing and development of infrastructure projects through the capital markets.
The authority said it had enlisted the Kenya Pension Funds Investment Consortium (KEPFIC) and the Nairobi Securities Exchange (NSE) for the initiative, in which they will target pension schemes to invest in the projects as provided for in the investments guidelines.
The deal is expected to lead to the growth and deepening of the country’s capital markets.
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It comes at a time when the Retirement Benefits Authority has introduced infrastructure as a distinct investment category under the pension fund investment regulations.
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The company told TUKO.co.ke that the partners will be seeking avenues to deploy pension funds’ investments into infrastructure projects using available capital markets products such as Green Bonds, Asset-Backed Securities (ABS) and Real Estate Investment Trusts (REITs).
The new investment allows pension funds to directly invest up to 10% of their portfolio in the asset class, which CMA says could potentially unlock approximately KSh 140 billion for infrastructure investments.
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According to the Authority, infrastructure investments are capital-intensive, meaning the pooling of long-term capital is necessary.
CMA added that the deal will not only leverage economies of scale but also help in financing big-ticket infrastructural projects.
The MoU is also expected to provide an avenue for enhancing the liquidity of KEPFIC investments through the capital markets.
Commenting on the same, NSE Chief Executive, Geoffrey Odundo said the collaboration falls in line with its strategy.
In a separate story, TUKO.co.ke reported that East African Breweries Limited (EABL)’s KSh 11 billion corporate bond floated early this month has been oversubscribed by 245% to hit KSh 37.9 billion.
The issue is the single largest non-infrastructure corporate bond and commercial papers offer ever floated in the Kenyan market.
Commenting on the development, Shamiah said the performance of the EABL Medium Term Note is a testament to the renewed interest in the corporate bond market with growing issuer and investor confidence.
Source: TUKO.co.ke
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