[kictanet] Day 4 of 10:- eContent Requirements for Regulators

[Bill Kagai]

On 10/15/07, John Walubengo <jwalu at yahoo.com> wrote:
> keep thinking outside the box and contribute.

In the spirit of thinking out of the box, you will see this conspiracy
theory that is developing that when capital market regulators attempt
to digitize the way of getting information through the internet and
websites, users still don't understand the relevance. The lesson
emerging is that regulators (CCK, CMA) etc need to support the
business case on their websites to help businesses they have licensed
grow.

The extract below from today's Business Daily explains the attempted
conspiracy theory which is a result of linkage breaking between
regulators and the businesses they license.

Vendors defend move to sell market data
http://www.bdafrica.com/index.php?option=com_content&task=view&id=3635&Itemid=5812

October 15 2007: When the Nairobi Stock Exchange closed its auditorium
on Monday apparently to  facilitate renovations, investors who
normally follow trading from the room read mischief.

They saw some uncanny coincidence between the closure and the
licensing of six companies to sell market-generated information to
investors.

After the noise generated by the development died out, the users of
the facility argued the closure was meant to create more business
opportunities for the data vendors.

Stung by the conspiracy theory, NSE chairman Jimnah Mbaru, rescinded
the decision to lock out the investors, saying they would be
accommodated even as the renovations went on.

The concerns raised by the investors point to the low value placed on
market information by the public, technocrats in the public service
and some in corporate Kenya where the greatest source of information
is word of mouth, probably because it is free.

That explains why despite having an opportunity to pore through market
statistics from the comfort of their desk tops by subscribing to a
data vending service, investors will opt to be physically present at
the bourse.

Data vendors say there is a misconception of exactly what they do with
many perceiving that they just sell raw data, which is distributed by
the NSE for free and published in the print and electronic media on a
daily and weekly basis.

This perception has made investors not see why they should pay about
Sh6,000 annually to use the proposed service, ensuring access to live
stream as well as historical data.

Data vending services are the latest phenomena in the Capital Markets
with the six players having come on to the scene just three months ago
after paying a licence fee of Sh170,000 (US $ 2500) to the NSE.

Aly-Khan Satchu of Rich Management Limited, says data vending is
"info-mediary", arguing that "the information is a valuable currency
like the dollar which helps in better decision making."

"It saves both time and money to the investor as previously they had
to continuously check with their brokers on the goings on at the stock
market," adds Robert Bitengo Maoga Chief Executive of Eight Limited,
another data vendor.

These benefits have, however, tended to be more discernible to people
in far flung areas like Meru, Nakuru, Eldoret and Kisumu because the
NSE is in Nairobi.
There are, however, plans to expand to the regions through technology.
Mr Bildad Kagai, the managing director of MediaCorp Limited said there
was need for investor education on the need for interpretation of
streamed data.

Though many retail investors want live streaming of data and
information, few neither understand it nor put it to use.

"We have realised that potential clients are having a problem
understanding the live data we stream," said Mr Kagai.

 The live data has three main boards:  Normal, Prompt and Odd boards.
An Investor can tell the number of shares of the listed companies
being sold and what is  available for sale. Retail investors form the
largest base of subscribers to the live data with an annual
subscription of Sh6,000.

Some corporate clients are interested in the research and historical
data available in digitised form for an annual subscription of between
Sh15, 000 and Sh20,000.

But, Satchu said, the long term investor is not so much concerned with
"the random walk of prices" which are the daily stock prices
appearing on data vendors websites.

"Our work is to digest the volumes of publicly available data in order
to arrive at useful precise points to gauge a company by just browsing
a page or two of accurate analysis," says Kagai.

Nonetheless, investors say they pay the NSE Levy to get services
including the live information displayed on the auditorium board.
--
Bildad Kagai
MD - MediaCorp Limited
Nairobi Stock Exchange [NSE] - Authorised Information Vendor
Suite B2 Tetu Apartments StateHouse Avenue
P. O. Box 20311-00200
Tel. 254 20 272 8332
Fax. Rendered Obsolete
URL. www.mediacorpafrica.com
--