Browsing by Author "Mbithi, Evelyn L."

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    Effectiveness of Risk Management Strategies among Market Intermediaries in Kenya
    (Daystar University, School of Business & Economics, 2014-05) Mbithi, Evelyn L.
    The purpose of this research was to identify risk management strategies applied by licensed entities in the Kenyan capital market and assess their effectiveness in mitigating different risks in the market. The required data for the study is qualitative in nature hence the researcher used descriptive research design. In addition, purposive selection was used to make the data comparable and hence only investment banks and stockbrokers were selected for the study. This is because though there are several intermediaries/licensed entities in Kenya only investment banks and stockbrokers have similar operations and are likely to be faced with similar types of risks. The population for the study was 89 licensed firms with about 150 people and this number was arrived at by assuming that some of the firms have more than two people dealing with risk management. Specifically, the 89 intermediaries include fund managers, investment advisers, collective investment schemes, authorized depositories, investment banks and stockbrokers. Where a firm was found to have more than two different positions handling risk for example risk manager, compliance officer, internal audit or finance manager only one of these people was interviewed and hence the firm had to specify the correct contact person/s on risk. The target population in terms of intermediaries was 21 as mentioned earlier this comprised of investment banks and stockbrokers. The study found out that the top four common risks in the securities market in Kenya were operational risk, regulatory risk, portfolio risk and liquidity risk. While common risk management strategies were credit facilities for liquidity risk management, use of compliance officers in managing regulatory risk and internal controls for operational risk as well as reconciliation to manage portfolio