There has been constant quest for improved service delivery by the people of Kenya. To achieve that, the
Kenya government opted to step in through inception of devolve funds. The intervention was through the
introduction of local authority transfer fund (LATF), roads levy, constituency development fund (CDF) etc.
Despite the central government financing, the incremental local revenue generated is not justifiable to the
financing granted, considering return on investments, value for money. While on the other hand, improved
service delivery is justifiable to the financing.
The paper highlights is based on a sample size of fifty three local authorities representing the views of a
target population of 175 local authorities in Kenya. It commences by obtaining revenue means prior and
after LATF. And undertaking T-statistics for volatility of various revenue. This is followed by evaluating the
extent on effect on LATF, factors affecting revenue, component matrix analysis and principle component
As from early 2000s, the Nairobi Securities Exchange (NSE) and the market regulator Capital Markets Authority (CMA) endeavored to reform the market. As part of the market reforms agenda, the Authority initiated market reforms in 2001 which led to the reorganization of the NSE into four distinct segments: the Main Investments Market Segment (MIMS); Alternative Investments Market Segment (AIMS); Fixed Income Securities Market Segment (FISMS); and the Futures and Options Market Segment (FOMS). To date all but the FOMS remain active. The derivatives market in Africa and specifically the NSE remains underdeveloped. One of the major hindrances to the derivatives market development, which is the focus of this paper, is the regulatory and policy environment. There is need to develop these so as to provide a framework within which the market can operate effectively and efficiently. Other disabling factors to the development of the derivatives market discussed in this paper include; low level of investor sophistication and awareness; lack of commodities on large scale; high frictional costs in the market structure; inadequate risk management; inadequate liquidity; and segmented regulation.
The paper further explores the efforts being done by the NSE and the CMA towards the development of the market. This includes the findings of the study undertaken by the CMA on the viability of establishing a futures and options market segment at the NSE. To help understand the factors hindering derivatives market development; in this paper, I have explained key concepts relating to derivatives market development and the various types of derivatives. The benefits and uses of derivatives and their down side/ disadvantages have also been highlighted, drawing from real life experiences across the globe. An overview of studies on derivatives and derivative markets in Latin America, India, South Africa, Asia and Kenya has been discussed.
This paper tests the profitability of momentum strategies in Kenya, an emerging market for the period 1995 to 2007. Both relative strength strategies (RSS) and (weighted relative strength strategies (WRSS) are employed to implement momentum-based trading strategies. Analysis revealed that Nairobi Stock Exchange (NSE) exhibit medium term return continuation over the
entire sample period and the sub-periods. We used RSS results to evaluate the influence of transaction costs, calendar effects, risk factors and other reported momentum characteristics on momentum profitability. We employ WRSS results to discriminate between the two diametrically opposed causes for the profitability of momentum strategies: behavioral factors (time-series continuation in the firm-specific component of returns), and risk factors (cross-sectional variation in expected returns and systematic risks of individual securities). Our results show that, consistent with the evidence elsewhere, momentum is an anomaly; the evidence is consistent with momentum being driven by continuation in the idiosyncratic component of individual-security, rather than by cross-sectional differences in expected return and risks.
The study aimed at determining factors that influence performance in CPA examinations conducted by KASNEB. Two approaches were used: First, approach examined factors that influence completion period of CPA examinations. A sample of 190 qualified students was randomly selected from a population of 1865 candidates who had qualified as at December 1996. Second approach examined factors which determine whether a student would pass the CPA Section 6 or not. A sample of 112 candidates who sat the December, 1995 and June 1996 examinations and passed was examined alongside a sample of 146 candidates drawn from a total population of 1007 candidates who sat and did not pass in the two sittings.
For each of the approaches, correlation, multiple regression analysis, stepwise regression, stepwise discriminate multiple discriminate analyses were conducted. In both cases, mode of study, educational background and occupation were found to be very significant variables. Age appeared also but with least significance. Analysis two identified Kenya College of Accountancy as a college that positively influenced passing. Analysis one gave emphasis on the manner of attempting the examination. English and Mathematics at “o” level also a positive association with completion period.
Regression analysis revealed that variables identified explained 80% of the reasons influencing completion period. Descriminant analysis showed that the same variables constituted over 90% of the discriminating attributes between those candidates who finished the course within a short time and those who take a long time to complete. Variables covered in influencing passing however, could only account for 30% of the reasons for passing or not passing under regression analysis and had only 35% discriminating ability between those candidates who fail and those who pass. This means that over 70% of the reasons for passing or not passing were not captured in this set of variables. Consequently, there is need to search and establish the factors that constitute the remaining 70% in all the analyses, regression and discriminant analyses strongly agreed on the findings.