Edward H. Ntalami
Edward Ntalami Born March 19, 1947
Occupation (former) Chief Executive Officer Website Capital Markets Authority
Edward Haggai Ntalami (born March 19, 1947 in Meru, Kenya) is a leading business executive and the former CEO of the Capital Markets Authority (CMA), which is an an equivalent of the Securities Exchange Commission (SEC) in the U.S. or the Financial Services Authority (FSA) in the UK. A prominent public finance figure , Ntalami is predominantly known for his vast involvements in Kenya’s capital markets. He has served for over two decades in financial planning and management in the fields of commerce and industry, public sector, and the profession. Prior to his appointment at the CMA, Ntalami was the Executive Director of Sterling Securities Limited, a local stock broking outfit. He was later ppointed Chief Executive, Capital Markets Authority in December 2002 by His Excellency President Mwai Kibaki. He completed his first term in office on 17 December 2007 upon which he chose not to renew his tenure for a second period. The current head at the helm of the CMA, after a seven-month long search, is Stella Kilonzo.
Ntalami's father Mzee Nkárachiá, was a prominent local elder who was renowned for his vast herds of cattle and livestock. It has been said that his extensive herd of cattle would cause massive jams of traffic as they crossed village roads and highways.
He was educated at Strathmore University (formerly Strathmore College), where in 1974 he qualified as a Fellow of the Association of Chartered Certified Accountants (ACCA) of the United Kingdom. At the age of 28, having already secured worthwhile employment with Housing Finance Company of Kenya (HFCK) Limited, Ntalami was awarded a rare scholarship opportunity by the Government of Kenya to pursue a Master of Business Administration (MBA) degree from the University of Sheffield, England. He accepted the offer, leaving for UK for a period of three years to further his education with a concentration in accounting and finance. After completing his MBA, Ntalami returned to his homeland, where in 1979 he qualified as a member of the Institute of Certified Public Accountants (CPA), Kenya.
Ntalami has had a rich career in finance and commerce spurning over a quarter of a century and culminating in his appointment as Chief Executive of the Capital Markets Authority, Kenya.
He began his profession in 1970 as an audit trainee with the City Council of Nairobi where he served for a period of two years. He later joined Magadi Soda Company (MSC) Limited, a mineral mining outfit serving as an Assistant Accountant at a period where the country had just attained its independence and racial discrimination was rife in the local employment scene. After two brief years at the company Ntalami left MSC having been granted an offer by Ernst and Young, a prominent international audit firm. He served as a senior audit assistant before later transferring to Housing Finance Company of Kenya (HFCK) Limited, a local real estate financier. Here, he worked as the Senior Accountant for a period of three years, harnessing this opportunity to secure a personal residence in Riara, Kilimani - an affluent suburb on the outskirts of Nairobi.
Later on, Ntalami served as Chief Accountant (and later, Ag. CEO) for the country’s premier national flag carrier, Kenya Airways, for a period of four years; a time that was characterized by robust performance of the Kenyan economy, translating into a bustling era for the airline industry.
The early 1980s, which was billed as the golden moment for local indigenous accounting firms, Ntalami became Partner at Kimani Onyancha & Company, a medium size firm of Certified Public Accountants involved primarily in the provision of statutory audits. He held special responsibility for the management consultancy services (MCS).
In 1995, after ten years of entrepreneurial accounting experience with KO& Co., he moved to transfer this exposure into the mainstream finance industry, choosing to enter the then budding yet vibrant line of stock brokerage. He served as Executive Director for Sterling Securities Limited (SSL), a then fledgling stock broking outfit.
Here, Ntalami participated in a number of private and public share issues and floatation, including initial public offerings (IPOs), divestiture, and privatization of public enterprises. At its peak in 1996, SSL was retained by Kenya Commercial Bank (KCB) as a sponsoring broker during its third share issue, which was hailed by financial analysts and critics alike as an unprecedented success in the country’s nascent finance industry.
By 1998, notwithstanding the exceptional success of the firm as a whole, internal conflicts and disagreements amongst partners began to afflict the business. Despite seeking legal recourse, attempts to resolve these business differences were futile and gradually attracted unwarranted media attention. Eventually after one year of legal tussles the partnership was dissolved culminating in the premature fold-up of the firm, in a bad year that was coupled by the poor performance of the economy.
Subsequently, on Wednesday, August 11, 1999, Sterling Securities Limited (SSL) was suspended from trading on the NSE. The Capital Markets Authority (CMA), then, cited 'operational and managerial constraints' as the reason for suspension. The broker has since resumed its operations.
Following the unexpected restructuring of the stockbroking business, Ntalami left to open and operate a Financial and Investment consultancy firm, Marited Associates, the name being a joint conjunction of “Maria” (his wife) and “Ted” (short for Edward).
Ntalami operated this stint for a period of two years before being called up in December, 2002 by His Excellency President Mwai Kibaki to serve in public office as the Chief Executive of the Capital Markets Authority, following a major cabinet and public service reshuffle.
Capital Markets Authority (CMA)
In December 2002, following an extensive re-organization of the Public Service, Ntalami was appointed by His Excellency President Mwai Kibaki as the Chief Executive of the Capital Markets Authority (CMA) in place of Paul. K. Melly. A new Chairman, Mr. Chege Waruinge, the Vice-Chancellor of Gretsa University and who was then Dean Professor Academic Affairs, United States Internatioanl University (USIU), was also appointed. On 14 January 2009 Prof Waruinge, tendered his resignation to the regulator’s board. The reasons for his departure were not immediately clear.
Ntalami completed his first term in office on 17 December 2007 upon which he chose not to renew his contract. His departure was immediately followed by the exit of Christine Mweti, the Head of Legal Services who was second in command at CMA, who has since moved to Renaissance Capital. Stella Kilonzo, was appointed the CMA acting chief executive while a rigorous recruiting effort has been under way. She was later confirmed as CEO on 15 July 2008
Highlights of tenure
Some of the key events that have characterized the Chief Executive’s tenure include:
- Kenya Re initial public offering:
The Government sold 40 per cent of its stake in the 37-year-old reinsurance firm, or 240 million shares, through an initial public offering (IPO) at the Nairobi Stock Exchange (NSE). The IPO opened on 18 July 2007, and closed on 31 July 2007. The IPO was oversubscribed by an average of 363.5 per cent with the retail segment, recording the highest oversubscription of 715 per cent. For the first time ever, the transaction team implemented the delivery versus payment (DVP) method, which allowed institutional investors and insurance firms to hold off payment until the share allocation was completed. 
- NSE revises stock market index:
On July 20, 2007, the Nairobi Stock Exchange (NSE) revised the companies listed on its main share index to replace inactive stocks. The 20-Share Index is a reflection of the twenty (20) most actively trading counters in Kenya and was last reviewed in May 2003.
In the financial sector, ICDCI replaced NIC Bank, while in the industrial sector; KenGen replaced BOC Gases, whose shares were suspended following the proposed merger with Carbacid Investments (see below). In the Agricultural sector, Rea Vipingo replaced Kakuzi, whereas, Mumias Sugar Company replaced Unilever Tea. In the Commercial and Service Sector, CMC replaced Uchumi Supermarkets Limited (under receivership - see below).
The review of the NSE 20-share index was done to bring on board newly listed firms with active trading track-records and would see the NSE market capitalization increase substantially with the entry of the profitable firms from the country's fastest growing economic sectors. It is expected that this will give the market a better image, which reflects the true value of the bourse as opposed to retaining less active stocks in the Index. 
- AccessKenya initial public offering:
On June 4, 2007 the AccessKenya Group was listed on the Nairobi Stock Exchange, becoming the first Information Communication Technology (ICT) company to do so. The web firm, which provides wireless access and email, said the listing for 800 million Kenyan shillings (U.S.$11.9 million) was oversubscribed by 363% with every category, from wealthy investors to institutional investors being fully subscribed.
The IPO also heralded the creation of a fifth investment segment at the bourse - the technology sector. This is in addition to the already existing agricultural, commercial and services, finance and investment and industrial and allied sectors.
The shares began trading at Sh14 with 1,000,000 shares changing hands within an hour of the opening bell.
- The Carbacid Investments vs BOC Group tussle:
An attempted takeover bid of Carbacid Investments by BOC Group was aborted after the capital markets regulator declined to endorse the deal. In May 2006, the CMA argued that the latter had not met all the terms it had stated in an offer to Carbacid shareholders. The critical condition in the deal to warrant the takeover and subsequent delisting of Carbacid from the NSE was that at least 80 per cent of Carbacid shareholders had to back the takeover transaction, but only owners holding 71.0 per cent backed the transaction. Ironically, a ruling by the Capital Markets Tribunal okayed the takeover forcing the CMA to appeal against the ruling. Mr Ntalami said the approval of the takeover deal was likely to set a bad precedent that would plunge future takeovers of listed companies into chaos.
The protracted takeover saga, that has seen the two counters suspended for over four(4) years was resolved in November, 2009, as trading in carbon dioxide manufacturer Carbacid shares resumed after suspension since 2005.
- Electronic trading commences at the NSE:
On September 11, 2006 the Nairobi Stock Exchange migrated from the hitherto Open Outcry system to the Automated Trading System (ATS), an electronic trading platform.  The President commissioned the new technology on 25 October 2006.
The change is expected to double the value of shares traded each day on the bourse with enhanced integrity and efficiency. Investors are now able to access current information thus facilitating them to make informed investment decisions on timely basis.
On December 17, 2007, the NSE completed its migration from the open outcry trading floor method to an all encompassing Wide Area Network (WAN) trading system which allows stockbrokers to trade from the comfort of their offices.
- Equity Bank listing:
Listing and official trading of Equity Bank shares on the NSE commenced on 7 August 2006; a day which saw the price move from Kes. 70 to Kes. 158 in a single price setting deal involving 1000 shares.
- ScanGroup Ltd. IPO:
On 17 July 2006, the initial public offer of Scangroup Limited shares kicked off what was to be a historical listing at the NSE. Scangroup, became the first marketing services company in Africa to go public through an IPO. The advertising house, an intelligence-intensive outfit, offloaded 69 million company shares into the capital markets at an offer price of Kes 10.45 per share. The IPO was oversubscribed by 520% and official trading of the company’s shares on the NSE) commenced on the August 29, 2006.
The Scangroup share price rose by 39% on its first day of trading to close the day at Kes. 15 with 3, 056,000 shares exchanging hands.
- KenGen IPO:
In April 2006, the Government offloaded 659.51 million shares in Kenya Electric Generating Company (KenGen) through the capital markets. The IPO premiered at the NSE at a discounted price of Kes. 11.90 price before rallying to a high of Sh40, representing a massive fourfold jump. The success of the IPO is credited for spurring the current appetite and excitement for investing in Kenya.
On April 25, 2007, an intended secondary offer for the shares, in pursuance of the IPO's initial success, was abruptly postponed by former Finance Minister Amos Kimunya attributing the move to the prevailing share price being very low and the bulk tariff conflict between Kengen and KPLC. 
- CFCStanbic Bank rights issue:
On December 23, 2005, CFCStanbic Bank officially listed 12.0 million new shares, arising out of its successfully completed rights issue. The bank succeeded in raising the Kes. 744 million (U.S.$10 million) needed to align its capital base with Central Bank of Kenya risk management guidelines.
- Uchumi Supermarkets rights issue:
In October 2005, the retail chain, already facing serious financial challenges, received approval from the CMA for its shareholders to inject an extra Kes. 1.1 billion (U.S.$15 million) through a rights share issue.
In May 2007, a year after the near-collapse of the retail supermarket, attention shifted to renewed efforts toward the retail chain's tortuous recovery strategy. The company's receiver-managers, led by Mr Jonanthan Ciano, offered shareholders yet another chance to inject Sh800 million (U.S.$ 11.4 million) into the company under a new recapitalisation plan. Analysts then observed that were the plan to fail due to shareholder reluctance, the retail chain would have to find a new equity partner to fund its recovery.
- KCB rights issue:
The highly successful Kenya Commercial Bank rights issue in September 2004, mobilized in excess of Kes. 2.3 billion (U.S.$31 million) needed for the bank's growth strategy. The rights offer for 50 million shares at a price of Kshs 49.00, was oversubscribed by 12.25%, necessitating a refund of Kes. 310 million (U.S.$4.1million) to applicants following shortage of untaken rights for allotment.
- Chief Executives of the CMA are contractually barred from directly owning any shares on the NSE and can only participate in bourse trading through new IPO issues (which come into the market without any prior bourse performance records). This serves to deflect any conflicts of interest.
- Ntalami, Francis Muthaura, the current Head of Civil Service and Secretary to the Cabinet and David Mwiraria, former Minister of Finance, were high-school mates from Nkubu Secondary School, Meru.
- Kenya's secondary bond market voted among the best in Africa: A report released by the International Monetary Fund (IMF), in April 2007, ranked Kenya's secondary bond market as among the most vibrant in Africa, coming only third to South Africa and Mauritius. The World Regional Economic Survey for April 2007 reports that, "Kenya's lengthening maturities which has allowed better pricing of debt instruments, puts it among the few countries in Africa with a vibrant debt market."
- The overwhelming success of the KenGen IPO was widely commended for generating a lot of awareness in investments among ordinary Kenyans of all ages, professions and income levels. The landmark IPO led to a massive interest in opening stock brokerage accounts and investing in Kenya. According to the Central Depository and Settlement Corporation (CDSC), the number of people with CDS accounts increased significantly and as at the end of June 2007 stood at over 750,000 accounts up from 78,300 in December 2005; a noteworthy tenfold increase in only one-and-a-half years.
- Many have also commended Ntalami for his resolve in rejecting plans to use a bookbuilding approach to allocate the KenGen shares. The initial plan is said to have been abandoned after it appeared to be biased against the small investor.
- Under Ntalami's watch at the healm, the NSE 20 Share Index posted a historic mark, surpassing its previous all-time high of 5,030 points, hit on February 18, 1994. As at close of trading on November 10, 2006 it stood at 5654.46 points. The NSE index has delivered an unprecedented growth in excess of over 300% over the last two and a half years.
- For over a decade since March 1996, the NSE had only listed three new companies, namely Kenya Airways, Mumias and ICID-I. In under four years of the former Chief Executive's tenure, the bourse witnessed the successful launch of six IPOs, namely KenGen, Scangroup, Eveready East Africa (listed with an oversubscription of over 800%), Mumias Sugar and AccessKenya Group (listed with an oversubscription of 363%) and recently Kenya Re (see photo (right)); including the oversubscription of five Rights Issues, namely KCB Bank, CFCStanbic Bank, Uchumi Supermarkets, Diamond Trust and Olympia Capital. Ntalami left office just prior to the landmark listing of Safaricom, the leading mobile telecommunications service provider in the country.
- The Year of the IPO: 2006 was hailed as "The Year of the IPO" by Madabhushi Soundarajan, former Managing Director, CFCStanbic Bank and CFC Financial Services. "You can call 2006 the Year of the Initial Public Offer where many Kenyans saw the benefit of the stock market to make wealth" he said, through a supplement/advertising feature released in the country's leading newspaper, Daily Nation on December 13, 2006. CFCStanbic Bank is part of the CFCStanbic Group whose Total Assets then stood at over KShs 16 billion. In line with this, James Murigu, the former Managing Director of Suntra Investment Bank, has commended the CMA's pace in processing of new applications for bourse listings.
- The CMA has been lauded by the private sector and newly listed companies for reviving confidence in Kenya's capital markets which has in turn translated into active participation from both manufacturing and service sectors. In August 2007, Renaissance Capital - a major multinational investment bank, was granted license to operate in Kenya. RenCap commended the regulator for the speedy processing of its application which showed its commitment to deepening the capital markets in Kenya.
- Investor Education and Awareness Programmes: On January 30, 2006 the CMA hosted a major Workshop at the Grand Regency Hotel, Nairobi, inviting leading media houses, journalists and industry players, both local and international, to train them on the tenets of good capital markets reporting. The CMA also participated in the Mombasa and Nairobi Agricultural Society of Kenya (ASK) shows in August and October 2006 respectively, where the Authority won an award for the Best Financial Institutions stand at the Mombasa ASK. CMA has in the past hosted a number of seminars including one for State Corporations. Also, in May 2007, the market regulator begun supplement releases to educate the public on the capital markets.
- Ntalami, a former stockbroker, and Jimnah Mbaru (current NSE Chairman and stockbroker), have been criticised in the past of being inappropriate to self-regulate the capital markets because their affiliations to capital markets could create potential conflicts of interest. The NSE (and its top management) have in the past come under fire for being an 'exclusive club' tightly controlled by an eighteen (18) member team of existing market brokers and investment banks. In fact, in a recent attempt to debunk this perception, it was reported on August 3, 2007 that the NSE would put up for sale a seat on its executive board at an estimated reserve price of Ksh 300 million (U.S.$4.5million). The coveted seat was clinched on August 21, 2007 by Renaissance Capital.
- Corporate bonds: There have been few corporate bonds approved since the beginning of 2006. The domestic bond market is widely viewed as under-developed, an observation made by Ntalami. A report released in April 2007 by the International Monetary Fund ranked Kenya's secondary bond market as being among the best in Africa, coming third only to South Africa and Mauritius. The outstanding value of corporate bonds as at the end of October 2006 rose to Kes. 8.6 billion ($123 million) following the issue of the second tranche of Shelter Afrique in October.
- Media shy: Unlike his contemporaries such as NSE chairman Jimnah Mbaru, Suntra Investment Bank's James Murigu and Standard Investment Bank's James Wangunyu, who do not mind the public limelight, Ntalami has by far and large curved out a quiet demeanor. There have been calls for the Chief Executive to be more visible and for the CMA to create a better communications/PR mechanism. Reacting to this, the CMA recently made efforts to bolster its human resource capacity. On 10 July 2007, it moved to recruit new personnel for various departments in financial, public relations, legal, research, IT and compliance. The recruitment is to be done through a human resources placement firm Osano and & Associates.
"We reckon that there are at least a dozen ICT companies in Kenya that are eligible for quotation on the Main Investment Market Segment of this exchange.”
- - At the inaugural IPO launch of corporate web firm, AccessKenya Group
“The board of the Authority has reviewed the award and considers that it raises significant legal and policy issues with far reaching implications on the long term operations of the capital markets in Kenya.”
- - Statement made in CMA's appeal against a tribunal ruling okaying the BOC Gases takeover of Carbacid
“Regulation only mitigates but does not guarantee against islotated instances of failure by licencees.”
- - In response to insolvency of suspended NSE stock-broker, Francis Thuo & Partners
“...invest with your eyes open!”
- -following the inaugural launch of ScanGroup IPO at the bourse. Nairobi, Kenya.
“The right to invest or not to invest cannot be taken away from him!”
- - in reference to an investor's prerogative to choose whether to invest (or not) in ScanGroup IPO share offer
Succession table at CMA Kenya
Paul K. Melly
CEO Capital Markets Authority (Kenya)
2002 - 2007
2008 - Present
Previous Chief Executives of the CMA (Kenya), include (a) William Chelashaw, who served from 1992 until 1997 and (b) Paul K. Melly, who served from 1998 until 2002.
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- Official site of the Capital Markets Authority, Kenya
- NSE’s stellar growth attracts Wall Street
- Wall Street calls on NSE brokers over Safaricom
- Russian investment bank spreads wing to Africa
- Economic boom ups business confidence
- Kenya bourse moves to electronic trading
- NSE Share Index hits historic high
- NSE gets fifth Investment Sector
- BOC's Carbacid takeover blocked by CMA appeal
- Kenya: Investors Look to Kampala for Opportunities
- Blogspot comments
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