An evaluation of the implementation of policy measures for development of the Nairobi Stock Exchange

Abstract

This study examines how the implementation of policy measures has had an impact on the development of the Nairobi Stock Exchange. The two objectives of the study were namely: (i) to evaluate the implementation of policy measures for development of the NSE. (ii)to ascertain the nature of impediments encountered in implementing the policies and recommend remedies. In order to meet these objectives the pertinent primary data was collected. Primary data was obtained from 36 registered stock market players at the Nairobi Stock Exchange. The respondents of the study were senior managers who are responsible for developing policies in their organizations. These organizations included NSE, CMA, stock brokerage firms, investment banks and fund managers. The study established that the CBK, NSE, RBA and the CMA have addressed the implementation of development of the NSE to a great extent through official supervision, monitoring of trading, imposition of portfolio rules upon banks, facilitation of better access to capital through floating of shares to the general public but have not adequately been able to act on product innovation through future options and financial derivatives and efforts to decentralize the NSE operations to other cities have been implemented to a small extent. The limitations of the research were the refusal of some senior managers of registered market players of the NSE refusal to participate in filling the questionnaires because they considered it as a waste of time.