Abstract
Financial intermediaries continue to play a big role in the internationalization of capital markets. In Kenya all transactions in the Nairobi Securities Exchange must be carried out by an authorized stock broker. This study covered the stockbrokers and their role in the internationalization of capital markets within Kenya. The study adopted a descriptive survey. Population of interest comprised of 19 stockbrokerage firms licensed to operate at the Nairobi Securities Exchange (NSE). The study findings indicate that stock brokers contribute to the internationalization of capital markets through their roles in facilitating cross-listing, offshoring and foreign investor by aiding in sourcing for investment opportunities, provision of relevant information and transaction facilitation. Study findings further reveals that the government issues, lack of awareness and knowledge on innovative strategies, adequate financial resources, availability of adequate infrastructure and trading costs affects stock brokers role in the internationalization of capital markets. The study recommends that the government and policy makers should direct efforts towards addressing the various bottlenecks that hinder the effectiveness of the stock brokers in the internationalization of capital markets in Kenya. Further, towards realizing efficiency and effectiveness these firms need to embrace technology and innovation.
Highlights
From the late 1990’s, there has been unprecedented deregulation of financial market processes as well as globalization of financial markets
Role of stock brokers in cross listing in the Internationalization of Capital Markets: One of the objectives of this study was to examine the contribution of stock broker role in cross-listing to internationalization of capital markets
Respondents were asked to indicate their level of agreement with various statements appropriate to the role of stock brokers in cross listing in the Internationalization of Capital Markets
Summary
From the late 1990’s, there has been unprecedented deregulation of financial market processes as well as globalization of financial markets. Europe has witnessed great strides towards financial liberalization that has seen the abolishing of capital controls and the adoption of Single Market programs (Sparrow, Farndale & Scullion, 2013). They say this had the aim of levelling the platform against which financial institutions and brokers could engage in. Such developments have fostered markets integration towards the internationalization of Capital Markets. Analyzing and decomposing the high interest rate spreads and margins in Kenya helps identify structural impediments that drive the high cost and low access of financial services such as the capital markets (Fonfara, 2011)
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