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CMA Freezes Amana Capital’s Redemptions Over Liquidity Issues

cma accused of favouring section of money markets players
Capital Markets Authority (CMA).[PHOTO/ COURTESY]

The Capital Markets Authority (CMA) has frozen Nairobi-based fund manager Amana Capital’s redemptions for 28 days over liquidity constrains.

The move is aimed at giving the fund manager time to realize strategies to improve its liquidity position to meet redemptions.

“The Authority has been engaging the Board and Management of Amana Capital, the Trustee and the Custodian as they put together solutions to the liquidity challenges,” read the Authority’s statement.

Early last month, it emerged that Amana Capital was stopping its investors from withdrawing funds, totaling to Ksh275 million.

Read: CMA To Regulate Coffee Trade Following Cartel Invasion

The fund’s woes are tied with the collapse of Nakumatt Holdings, where it had invested up to 20 percent of its assets.

Amana was among schools, wealth management funds, insurance agencies, individuals and 800 commercial debt paper holders who lost Ksh4 billion from Nakumatt.

Nakumatt floated a commercial paper in 2016. Companies issue commercial papers when they need more money to run their business.

They are attractive to investors because they offer higher interest rates than other short-term options such Treasury Bills and fixed deposits.

To date, Nakumatt has been unable to service the loan given by investors.

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Written by Francis Muli

Follow me on Twitter @francismuli_. Email

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