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11 March, 2019
CEO Speeches

MARCH 11, 2019                                                                                                 

The Chairman of Cytonn Group, Chairman of the Cytonn Asset Managers, Board members of the respective Cytonn Companies, Cytonn Staff and Clients present, Members of the Press, Ladies and Gentlemen, Good Morning

I am very pleased to be here this morning to grace this occasion of the launch of Cytonn Asset Managers Limited. The entrance of a new player in the capital market is a clear manifestation that the efforts we are undertaking as Government to encourage the private sector to play a role in the development of the economy are bearing fruits. As a government, we shall continue focusing on developing conducive policies and an enabling environment to attract more capital both from domestic and foreign investors.

The government has articulated Agenda Four and made the attainment of Agenda Four as a priority. We all know that to attain Agenda Four, we shall need to mobilize significant resources and investments. For investments mobilisation to be successful, we have to put a lot of effort towards deepening of capital markets and financial products development.  Affordable Housing pillar of agenda four requires a lot of capital mobilization and the capital markets need to play a role in this mobilisation. We shall work with the various stakeholders to ensure that there is continued innovation to also bring affordable investment products into the market. It is clear that Kenyans are hungry for affordable investment products as can be seen from the recent success of the M-Akiba bond, which we have now issued for the second time. The M-Akiba bond, which is indeed a Mobile Investment, is a continuation of the pioneering trend in Kenya of bringing finance and investments to the mobile platform, as seen in M-Pesa, Mobile Banking, Mobile Money and now Mobile Investments. The government has pioneered Mobile Investments through M-Akiba, I hope that private sector market players will now follow suit and bring transactions such as share sales and purchases, and unit trust investments to the mobile. There is no reason why in this day and age, investors have to fill in pages of forms and wait for a working day just to withdraw a few thousand shillings from their unit trust funds.

The various regulators are working hard to ensure that there are supportive regulations to support various products that can be issued to the market. I particularly take this opportunity to congratulate the Capital Markets Authority which has continued to be on the forefront in developing supporting regulations to bring into the market various products.   For example, the operationalization of the REIT regulations few years ago was meant to help investors come together and mobilize funds for development. The success of this would go a long way for us as government, since provision of affordable housing to the citizen is key. We encourage the capital market players to come together and help mobilise funds that can be used in developing these housing schemes even as they seek great returns for their funds.

As a country our savings rates has been low, to improve on this we shall continue to partner with the various stakeholders for citizen sensitization. To this end, I would like to congratulate the Retirement Benefits Authority that has done a lot in member sensitization. The Retirement Benefits Assets have continued to grow and now we they stand at ksh 1.3 trillion. Despite the tremendous growth, it is important to note that there are still very few people belonging to pension schemes as the penetration rates stand at around 15%, meaning that 85%, a vast majority of Kenyans still remain without a pension coverage. It is the work of the government together with the private sector to continuously carry out education on the importance of savings and investments.

We cannot be blind to the fact that there are people who take advantage of the investing public. It is therefore important for us as government to ensure that there is sufficient surveillance on the operations of the various companies to ensure that investors’ funds are taken care of. Indeed, you have witnessed heightened oversight from different regulators such as the Capital Markets Authority (CMA), The Retirement Benefits Authority (RBA), Sacco Regulatory Authority (SASRA), and the Central Bank of Kenya (CBK). All with the aim to ensure that the investing public is well protected.

The coming in of Cytonn Asset Managers Limited into the regulatory space is a positive step as it helps with oversight of the operations of the organisation. This will increase confidence as the company will have to adhere to the set code of conducts and greater governance standards. I hope that just as Cytonn has done for High Net-worth Investors, it will now also bring high yielding, above average returns to the common mwananchi.

Mine is now to challenge Cytonn Asset Managers, together with the other capital market players, to continue working hard on three things that require particular focus, (i) first, is continuous product development to ensure that we are delivering to investors products that are relevant to their investment needs, (ii) second is to provide sufficient protection to the investors to ensure hard earned investments are properly safeguarded, (iii) Digitization and automation to ensure that the investment world comes at par with the digitization in mobile money and mobile banking. To give an example, if today I need some money from my bank account or from my M-Pesa, I can get it right on my phone, but if I need to access money from my Money Market Fund, I can’t do so from my mobile device; we should make it very easy for investors to access their funds. As a government we shall work together with the market by coming up with the right policies and regulations.

Thank you and Congratulations on the launch of your business. I wish you well in your future endeavours.