Headline : Limiting infrastructure bonds? Revisit M-Akiba

Read more from the original article on here at www.businessdailyafrica.com.

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The National Treasury plans to restrict infrastructure bonds to retail investors in a new set of reforms.

If this proposal sees the light of day, banks and pension funds dominating Kenya’s fixed income market will be locked out of participation in instruments whose allure is the tax-free status guaranteed under Income Tax Act. Insurance firms and parastatals will equally be barred.

“The National Treasury intends to undertake reforms in the restructuring of the primary market activities to reduce borrowing costs and promote market activity. To manage competition between tax-free infrastructure bonds and Treasury bonds, it may be beneficial to restrict infrastructure bonds to retail investors”, the National Treasury says in the Budget Summary for 2024/25 tabled before the National Assembly on April 30.

This consideration makes for an interesting development that should stir up debate in Kenya on the state of the fixed-income market and what can be done to crowd in more retail investors to participate.

Read more from the original article on here at www.businessdailyafrica.com.

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