A Thesis submitted in partial fulfillment of the requirements for the degree of Master of Business Administration (Corporate Management)of the School of Business KCA University
This Research project investigated the factors influencing the invetors to invest in
equities as oppossed to Bonds in Banking industry in kenya. Development of bonds
market widens the financing options for firms and enables the government to shift its
domestic debt to longer-term securities. However, development of bonds market requires
that certain conditions be in place. These include a developed money market, wider
participation and protection of investors, reduced information asymmetry and an efficient
trading system. This would boost the market microstructure and facilitate development of
the market.
The level of development of Kenya’s bonds market indicates that the country is very far
from developing this market. The length of treasury bonds market is shorter than that of
developed bonds markets, the trading system is not harmonized with intermediaries using
different pricing models, and the regulatory framework is also weak to accommodate
diversification of corporate bonds. Also, growth of corporate bonds is yet to pick
momentum, and the debt market is thin, with the type of securities that have negative
implications on the
competitiveness of the market. There also gaps between the regulatory framework and the
objectives of bonds market development. Thus, developing the bonds market requires
huge investment in institutional building.
Chapter two review the literature on,the conceptual framework and theoretical
framework. Empirical reviews, a critique of the literarure and research gaps are also
covered.
Companies issue bonds to finance operations. Most companies can borrow from banks,
but view direct borrowing from a bank as more restrictive and expensive than selling debt
on the open market through a bond issue, while the last chapter is comprises of research
design, population, sampling, data collection, pilot study, data analysis and presentation.
