Kurzweil
JF-Expert Member
- May 25, 2011
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Listed banks lost more than Sh45 billion from their cumulative worth within hours of a new era in banking where interest rates are regulated. Panicky investors rushed to sell their shares with supply outstripping demand, as the impact of President Uhuru Kenyatta's decision began to sink in.
Mohamed Wehliye, a top banker and financial columnist, attributed the fall in banks' valuations to the investors sentiment about the policy direction set by the new law.
"Markets are driven by investor sentiments. Policy initiatives announcements may either have negative or positive impact," Mr Wehliye said yesterday as the meltdown on the banking stocks started.
Capping of interest rates is expected to hit the earnings of the banks, which have for long been making high profits at the expense of borrowers. James Mureu is among the millions of Kenyans who supported regulation of lending rates.
"The banks must reduce their appetite for the customers' money," said Mr Mureu, a former banker at the Central Bank of Kenya.
Most Kenyans were, however, excited about the new laws, amid concerns that one of the major lenders had suspended issuance of unsecured loans.
Analysts at the Standard Investment Bank (Sib) projected that the new laws will take effect in about three weeks, to allow for the formulation of the enacting guidelines, which will be drafted by National Treasury Cabinet Secretary Henry Rotich.
"We expect further price falls as investors continue to digest the news, and understand the full extent of impact of the new law on earnings," said Sib analysts.
Sib projections suggest further devaluation from yesterday's Sh45.5 billion, which happened on the first day of trading, after the enactment of the new law capping interest rates.
It would turn out to be the biggest loss in a single day for the investors in the Nairobi Stock Exchange. Thabit Ndilahomba Betty Kwoko Peter Joseph Japhet Justine Sayi Busara Raymond.
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On August 24, 2016
President Uhuru Kenyatta signing into law the 2015 Banking (Amendment) Bill at State House
President Uhuru Kenyatta has signed into law a Bill capping bank interest rates at 4 per cent above the Central Bank Benchmark Rate, currently at 10.5 per cent.
The law will regulate applicable rates to bank loans and deposits thereby capping the interest that banks can charge on loans and deposits, President Kenyatta said in a statement to newsrooms on Wednesday.
The President said he had consulted widely and had learnt that Kenyans were disappointed and frustrated by the insensitivity of the banks.
Mohamed Wehliye, a top banker and financial columnist, attributed the fall in banks' valuations to the investors sentiment about the policy direction set by the new law.
"Markets are driven by investor sentiments. Policy initiatives announcements may either have negative or positive impact," Mr Wehliye said yesterday as the meltdown on the banking stocks started.
Capping of interest rates is expected to hit the earnings of the banks, which have for long been making high profits at the expense of borrowers. James Mureu is among the millions of Kenyans who supported regulation of lending rates.
"The banks must reduce their appetite for the customers' money," said Mr Mureu, a former banker at the Central Bank of Kenya.
Most Kenyans were, however, excited about the new laws, amid concerns that one of the major lenders had suspended issuance of unsecured loans.
Analysts at the Standard Investment Bank (Sib) projected that the new laws will take effect in about three weeks, to allow for the formulation of the enacting guidelines, which will be drafted by National Treasury Cabinet Secretary Henry Rotich.
"We expect further price falls as investors continue to digest the news, and understand the full extent of impact of the new law on earnings," said Sib analysts.
Sib projections suggest further devaluation from yesterday's Sh45.5 billion, which happened on the first day of trading, after the enactment of the new law capping interest rates.
It would turn out to be the biggest loss in a single day for the investors in the Nairobi Stock Exchange. Thabit Ndilahomba Betty Kwoko Peter Joseph Japhet Justine Sayi Busara Raymond.
========
On August 24, 2016
President Uhuru Kenyatta signing into law the 2015 Banking (Amendment) Bill at State House
President Uhuru Kenyatta has signed into law a Bill capping bank interest rates at 4 per cent above the Central Bank Benchmark Rate, currently at 10.5 per cent.
The law will regulate applicable rates to bank loans and deposits thereby capping the interest that banks can charge on loans and deposits, President Kenyatta said in a statement to newsrooms on Wednesday.
The President said he had consulted widely and had learnt that Kenyans were disappointed and frustrated by the insensitivity of the banks.
