Amid public scrutiny, the CMA and NSE are finally having to face a much needed restructure. That's the beauty of market downturns! They force the big tymers to re-look at the operations, go back to the drawing board and in this case (hopefully) make the system more transparent by necessitating necessary changes. -by the way, as part of his 2007 campaign promises, the PM pledged to look into the rot at the NSE and to ensure that more brokers are licensed; but I digress...
In the absence of short-sellers bull markets don't provide enough incentive to ensure that the systems work; if we're all making money, why spoil the party?? ...My personal experience on the floor of the NSE, was that the CEO would show up when several counters would hit the (lower) 10% limit on daily trades. The question he'd ask was, what's happening to our market? When the bulls had their day; no questions were asked, everyone was making money!
So why is it that there'r lots of alleged fraudulent schemes now being identified globally? Madoff, Stanford, Santyam and the countless pyramid schemes?? INMHO, downturns make it more difficult to conceal financial shenanigans and their trickery since more often than not, their goal is to falsify profitability which is rather difficult once the bear hangs around for some time.
I hope the Kenyan market regulators get their affairs in order sooner rather than later. But then again, who really cares about the general public? The trend since the dot com crush has been to move towards private equity where there'r less questions asked and (increasingly) more money to be made. So, why streamline the systems for the masses to profit possibly at your expense? Would a real capitalist do that?
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