{"id":14947,"date":"2024-06-27T00:00:06","date_gmt":"2024-06-26T21:00:06","guid":{"rendered":"https:\/\/ch.jfdi.cc\/?p=14947"},"modified":"2024-06-27T00:00:06","modified_gmt":"2024-06-26T21:00:06","slug":"kenya-bond-tax-seen-as-new-hurdle-for-tiny-corporate-debt-market","status":"publish","type":"post","link":"https:\/\/ch.jfdi.cc\/?p=14947","title":{"rendered":"Kenya Bond Tax Seen as New Hurdle for Tiny Corporate Debt Market"},"content":{"rendered":"<p>Bloomberg |      Jun 26, 2024 04:09 PM IST     <label class=\"share share-candidate\" data-url=\"https:\/\/www.hindustantimes.com\/world-news\/kenya-bond-tax-seen-as-new-hurdle-for-tiny-corporate-debt-market-101719398393188.html\" data-title=\"Kenya Bond Tax Seen as New Hurdle for Tiny Corporate Debt Market\" title=\"share\" data-links for=\"sharePop-1-101719398393188\"><\/label>  <label class=\"sharePopUp\" for=\"sharePop-1-101719398393188\">  Share Via         Copy Link   <\/label>  <!-- socialEl -->   <button id=\"htEchoShareBar\"><\/button>   <\/p>\n<h2 class=\"sortDec\">Already haunted by a history of company collapses, Kenya\u2019s moribund corporate bond market risks a fresh setback from authorities plans for a withholding tax on green bonds.<\/h2>\n<p>          Already haunted by a history of company collapses, Kenya\u2019s moribund corporate bond market risks a fresh setback from authorities plans for a withholding tax on green bonds.\u00a0  <\/p>\n<figure class> <span>     <\/span><figcaption>Kenya Bond Tax Seen as New Hurdle for Tiny Corporate Debt Market<\/figcaption><\/figure>\n<p>   The proposed tax received the nod from parliament this week, alongside a package of other measures designed to cut Kenya\u2019s budget deficit. The wider bill, which sparked nationwide protests, now requires President William Ruto\u2019s approval. If passed, local investors would become liable for a 5% tax on interest earned from infrastructure and green bonds.      \u201cThe proposed taxes will totally dampen that growth of corporate bonds,\u201d said Terrence Adembesa, chief executive officer of East African Bond Exchange, which received its operating license in February and has been hoping to lure new listings. \u201cIssuance is still very low and is actually a concern for us.\u201d\u00a0   Adembesa said that while Kenya is the third-biggest economy in sub-Saharan Africa, the value of corporate debt issued is barely 0.2% of its gross domestic product. Kenya also lags African nations on the issuance of sustainability-linked securities, he added.\u00a0   Hopes grew for the market in recent months as Safaricom Plc, Equity Group Holdings Plc and KCB Group Plc \u2014 among Kenya\u2019s largest companies \u2014 announced plans to issue shilling debt. The companies declined to comment on whether the proposed withholding tax would impact their issuance plans.   for the twice-weekly Next Africa newsletter   The market faces other headwinds too, including the high yields on government debt \u2014 one-year Treasury bills yield about 16% and three-year bonds pay 18%. But the struggle to grow the market has intensified since 2015, when the collapse of Chase Bank Kenya Ltd. and the now-liquidated Imperial Bank Ltd saddled bondholders with losses.\u00a0   Since then, only five companies have sold debt, according to Nairobi Securities Exchange data, the last being a 2022 issue from Kenya Mortgage Refinance Co. There have been just two green bonds \u2014 one in 2019 from student accommodation developer Acorn Holdings Ltd., and one from Burn Manufacturing last year, to expand clean stove-making operations.\u00a0   Churchill Ogutu, an economist at IC Asset Managers, reckons a revival of the corporate bond market hinges also on greater protection for investors. When Chase and Imperial folded, depositors in both banks were partially compensated, but bondholders lost all their money, he said, adding that Kenya needs a law clarifying how bondholders are treated, relative to other creditors.   \u2018If you don\u2019t ascertain that fixed income debt is secure, then investors will be shy to participate,\u201d Ogutu said.\u00a0   You can follow Bloomberg\u2019s reporting on Africa on WhatsApp. .   With assistance from Eric Ombok.  <strong>This article was generated from an automated news agency feed without modifications to text.<\/strong>          Get World Cup ready with Crickit! From live scores to match stats, catch all the action here. Explore now! <span class=\"moreBtn\">See more<\/span>  Get Current Updates on World News, US News ,  Hollywood News ,  Anime and Top Headlines from around the world.              Share this article    <label class=\"share share-candidate\" data-url=\"https:\/\/www.hindustantimes.com\/world-news\/kenya-bond-tax-seen-as-new-hurdle-for-tiny-corporate-debt-market-101719398393188.html\" data-title=\"Kenya Bond Tax Seen as New Hurdle for Tiny Corporate Debt Market\" title=\"share\" data-links for=\"sharePop-3-101719398393188\"><\/label>  <label class=\"sharePopUp\" for=\"sharePop-3-101719398393188\">  Share Via         Copy Link   <\/label>  <!-- socialEl -->     <button class=\"swiper-button-prev\" id=\"swiper-button-prev\"><\/button> <\/p>\n<ul id=\"slideGroup\">\n<li class=\"slideItem\">    Kenya  <\/li>\n<li class=\"slideItem\">   Budget Deficit  <\/li>\n<\/ul>\n<p> <button class=\"swiper-button-next\" id=\"swiper-button-next\"><\/button>     News <span>\/<\/span> World News <span>\/<\/span> Kenya Bond Tax Seen as New Hurdle for Tiny Corporate Debt Market<\/p>\n","protected":false},"excerpt":{"rendered":"<p>Bloomberg | Jun 26, 2024 04:09 PM IST Share Via Copy Link Already haunted by a history of company collapses, Kenya\u2019s moribund corporate bond market risks a fresh setback from authorities plans for a withholding tax on green bonds. Already haunted by a history of company collapses, Kenya\u2019s moribund corporate bond market risks a fresh &#8230; <a title=\"Kenya Bond Tax Seen as New Hurdle for Tiny Corporate Debt Market\" class=\"read-more\" href=\"https:\/\/ch.jfdi.cc\/?p=14947\" aria-label=\"Read more about Kenya Bond Tax Seen as New Hurdle for Tiny Corporate Debt Market\">Read 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