Wednesday, March 12, 2008

Rogue brokers?

A somewhat irresponsible article in the wake of the collapse of Nyaga Stockbrokers last week – fingers four more brokers that the (now awake) regulator has issues with. An article of this magnitude about a bank could cause a run on deposits or worse.

But the firms - Solid Securities, Reliable, Crossfield and Discount Securities appear not to have been affected, and a causal visit to their offices shows they are are devoid of crowds of panicked investors as seen on TV last week. These are not ‘rogue’ brokers robbing their clients, just some brokers who have other regulatory issues to sort out.


FoodMerchant said...

Irresponsible seems a strong word. Considering what the Capital Markets have been through of late, I think the papers have an obligation to keep investors aware of what the market is up to, especially in the context that the the firms put in recievership caught most people by suprise.

I think the article does a great job giving reasons why there is added vigilance by CMA and what the brokers are doing to get up to speed without undue speculation.

My two cents.

ka-investor said...

I think all stockbrokers offices should have a ceveat emptor some where all investors can see when dealing with them. And lets not forget their 'dodgy' agents.

MainaT said...

Haiya. I am sorry to have to this but a broker which transacted Ksh8bn+ in 2007 went broke last week, and you are bellyaching about the exposure of four small-time brokers leading to a run.
Perspective...perspective bwana.

What the CMA should have asked all brokers is to publish their 2007 accounts publicly asap! That is if its interested in restoring confidence...

bankelele said...

FoodMerchant: But like with CBK supervison report in which they raise issues with all banks, CMA probably has (I hope) audit reports that it shares with all brokers (large and small). It doesn't mean they are unstable, and leak of such a report can cause public panic.
- The papers did their part highlighting investor problems at Nyagah and Fthupo before they collpased

ka-investor: Hmm, you've touched on another unregulated area -'dodgy' agents.

MainaT: Nyaga probably expanded too fast to rural Kenya following the Kengen euphoria, only to discover that Kenyans' don't trade shares very much once they bought them.
- I agree all brokers should publish their quarterly accounts and audited annual accounts (it woudl only cost 70,000 - $1,000 each time)

Girl In the Meadow said...

i agree with you Banks, that was sensational reporting.

maina said...

i am an investor in diaspora whose disappointed with my broker.please could someone expalin to me the procedures of changing brokers.


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