Stockbrokers call off plan to suspend trading

Stockbrokers continued trading on Friday a day after they had said they would stop doing so in protest against the stalemate surrounding capital gains tax.

On Thursday, brokers said they would stop trading for one month from February 20 as they wait for a ruling on a case about collection and remittance of five per cent gain on securities.

The Kenya Association of Stockbrokers and Investment Banks said it had decided to rescind its plans.

“Following consultations, and in the interest of maintaining the sanctity and stability of the capital markets in Kenya, the association has further resolved that they shall not suspend trading and that the exchange shall operate as normal on February 20, 2015,” the brokers said.

The Capital Markets Authority spokesperson, Mr Anthony Mwangi, told Nation by phone that brokers have no powers to unilaterally suspend trading at the exchange, saying the mandate lies with the regulator.

The markets regulator on Friday sought to forestall a crisis in the exchange by threatening to slap brokers with penalties if they suspend trading.

The brokers, however, said they are hoping that the sticky issues would be ironed out. “We are hoping that the issues around the tax can be revolved as soon as possible,” said stockbrokers’ association chief executive officer, Mr Mwangi.

Already, the bourse has proposed to the regulator exemption of tax on gains from marketable securities traded on the bourse as a way out of the crisis.

“The capital gains tax (on securities) really messes up everything,” Faida Investment Bank chief executive, Mr Bob Karina said adding; “We were never involved in crafting this tax. We should have been given a chance to participate and come up with a middle ground that is acceptable to everyone.”