Global Advanced Research Journal of Management and Business Studies (GARJMBS) ISSN: 2315-5086 May 2012 Vol. 2(5), pp 258-267

Copyright © 2013 Global Advanced Research Journals   

 

Original Research Articles

Factors influencing development of financial derivatives markets: a survey of listed companies in Kenya 

Ngugi Nahashon Njoroge1, Njagi Gabriel Matumo2* and Kimani E Maina3 

1JomoKenyatta University of Agriculture and Technology, P. o Box 58791 – 00200, Nairobi, Kenya.

*2JomoKenyatta University of Agriculture and Technology, P. o Box 15-60400, Kenya.

3JomoKenyatta University of Agriculture and Technology,  P. o Box 20, Kalimoni-Juja, Kenya.

*Corresponding Author’s E-mail: gabrielmatumo@gmail.com 

Accepted 09 May 2013

 

Abstract

The Kenyan economy is becoming more and more open with international trading constantly increasing and as a result Kenyan firms become more exposed to foreign exchange rate fluctuations. The relative price changes affect the firms’ competitive market position, leading to changes in cash flows and ultimately, in firms value. While it was observed that firms use a variety of instruments to manage financial risks, it was  not clear whether the full potential of these instruments is being realized since not all firms use derivatives and not all firms use all types and more important, whether they are used appropriately. The study found out that the use of financial derivatives instruments by quoted companies in Kenya is mainly influenced by legal and regulatory framework, market environment, operational efficiency and the role of financial market intermediaries. Hence the study concluded that there is need of building upon existing financial derivatives instruments so as to enhance efficiency and effectiveness in their use in Kenya as modern tools for financial risk management. 

Keywords: Derivatives market, counterparty-risks, Systematic risks, Unsystematic risks, emerging markets, hedging

Related Articles


Original Research Articles
Balgah RA and Buchenrieder G
Risk, uncertainty and decision-making. An empirical test of Irving fisher’s theory of interest
Glo. Adv. Res. J. Manage. Bus. Stud. November 2012 Vol: 1(2): - [Abstract] [Full Text - PDF] (158 KB)
Guedjeo CS, Kagou Dongmo A, Ngapgue F Nkouathio DG, Zangmo Tefogoum G, Gountie Dedzo M and Nono A
Natural hazards along the Bamenda escarpment and its environs: The case of landslide, rock fall and flood risks (Cameroon volcanic line, North-West Region)
Glo. Adv. Res. J. Manage. Bus. Stud. February 2013 Vol: 2(1): - [Abstract] [Full Text - PDF] (1,957 KB)
Review
Abhishek Gupta
Labour welfare and social security in globalizing economy.
Glo. Adv. Res. J. Manage. Bus. Stud. April 2013 Vol: 2(3): - [Abstract] [Full Text - PDF] (317 KB)
Original Research Article
Youssef El Hani, Najat Mahassini, Leila Radi and Abdelkarim Filali-Maltouf
Risk management in the Hospital: Application of the method FMECA in a university laboratory of Pathological anatomy and cytology (PAC)
Glo. Adv. Res. J. Manage. Bus. Stud. November 2017 Vol: 6(11): - [Abstract] [Full Text - PDF] (732 KB)
Reviews
Sandra N Gonzalez-Diaz, Claudia I Gallego Corella, Gabriela Galindo Rodríguez, Lucia Leal Villarreal, Alfredo Arias Cruz and José Antonio Buenfil López
Asthma and Pregnancy – Comorbid and Coexisting
Glo. Adv. Res. J. Manage. Bus. Stud. December 2012 Vol: 1(11): - [Abstract] [Full Text - PDF] (1,673 KB)
Kabeh JD
The Role of Biotechnology in Solving Global Food Crisis
Glo. Adv. Res. J. Manage. Bus. Stud. October 2012 Vol: 1(3): - [Abstract] [Full Text - PDF] (167 KB)

Current Issue

Viewing Options

View Full Article - PDF
Download Full Article - PDF

Search for Articles

Ngugi Nahashon Njoroge on Google Scholar
Ngugi Nahashon Njoroge on Pubmed
Njagi Gabriel Matumo on Google Scholar
Njagi Gabriel Matumo on Pubmed
Kimani E Maina on Google Scholar
Kimani E Maina on Pubmed

Statistics

Viewed 2222
Printed 950
Downloaded 9660
Powered By iPortal Works