NSE Suspends KES 10 Billion Chase Bank Bond

The Nairobi Securities Exchange (NSE) has suspended the KES 10 billion corporate bond that had been issued by Chase Bank from trading at the NSE in a move that was effected last Monday. Chase Bank has been placed under receivership by the Central Bank of Kenya for a period of 12 months.

The suspension came after the Capital Market Authority ordered the suspension of the bond. Capital Market Authority has in the recent month come under scrutiny as to whether it was up to task to execute what lies within its mandate as per stipulated in the law. This month, the authority came under fire after National Bank of Kenya flouted the law by announcing the financial year results with a loss of more than 25 percent without timely prior warning to shareholders and the general public as required by the law. The regulator, which had said that NBK broke no rule made a U turn yesterday by announcing that it had fined NBK an undisclosed amount of money for going against the law further raising more eyebrows.

Concerning Chase Bank bond suspension, NSE said in a statement “Notice is hereby given on the suspension of trading of the Chase Bank Fixed Rate Notes listed on the Fixed Income Securities Market Segment of the NSE, in line with directives received from the Capital Market’s Authority, effective April 8, 2016.”

According to economic analysts, Chase Bank’s fall from grace was unprecedented as the institution offered some of the best products in the market. Most analysts say that the lender came down specifically due to massive withdrawals from depositors after their confidence with the bank’s capability to handle their cash was tempered. The Central Bank of Kenya also came to the defense of Chase Bank saying that the unsubstantiated information that circulated around the social media about Chase Bank is what greatly contributed to the coming down of the lender.

Article by Juma Fred.