Standard Investment Bank (SIB) has been appointed by the Central Depository and Settlement Corporation (CDSC) to act as an agent to facilitate borrowing and lending of shares under a new investment path aimed at boosting stock trading at the NSE.
SIB, one of Kenya’s foremost indigenous investment banks, has fulfilled all the requirements necessary to be appointed as a Securities, Lending and Borrowing (SLB) agent. “Further to your application for appointment as SLB agents, we confirm that SIB Limited has met all the requirements and is hereby appointed as an SLB agent,” CDSC chief executive Nkoregamba Mwebesa said.
An SLB agent facilitates the temporary transfer of shares between a lender and a borrower at a predetermined fee and the agreement to return the securities at a future, predetermined time or on demand. This practice is commonly used increase the volume of trading because it eases the process.
Speaking on the matter, SIB Managing Director, James Wangunyu said, “Enhancing service delivery in the investments space has always been a priority for us; our SLB agent status is just one more avenue through which we can foster a more active trading environment.”
The lending and borrowing market works for investors with idle portfolios, who lend out their stocks for a fee while still maintaining ownership of them, including voting rights on the equity. Borrowers, on the other hand, are active market players who can short the market or trade on the shares and return the stocks after an agreed period, splitting gains with the lender.
Notes to the Editor:
Standard Investment Bank (SIB) is a leading financial services firm in Kenya founded in the year 1995 with over Kshs. 850 million worth of shareholders’ funds. The firm offers the market a single point of entry for Asset Management, Securities Trading, Market Research, Investment Management and Corporate Finance.