The Kenyan market saw changes made progressively over 2014. The Kenyan Capital Markets Authority published its 10-year plan under which it will seek to modernise and strengthen its domestic capital markets, develop new products and consolidate past gains.

A notable initiative was the successful de-mutualisation and self-listing of the Nairobi Securities Exchange (NSE) in June and September 2014 respectively. Other short-term initiatives include the modernisation of Kenya’s Central Depository and Settlement Corporation, as well as the review of the regulatory framework to support the introduction of new products such as commodities and derivatives, margin trading and securities lending.

A less positive change for participants is the introduction of the capital gains tax at a 5% rate, effective January 1 2015. “The application of the tax is still unclear and the market participants are awaiting the publication of guidelines by the Kenya Revenue Authority, on how the tax will be implemented,” says Janet Waiguru, head of Standard Bank’s investor services business in East Africa.

“Notwithstanding this, Kenya has been one of the hot markets for foreign investors in 2014, as witnessed in the significant growth seen in our sub-custody book in the market,” says Waiguru.