Relationship between Bond Trading Platform, Ownership Concentration and Securities Market Performance in Kenya

Abstract

The Nairobi Securities Exchange (NSE) has implemented various financial trading platforms with the aim of enhancing securities market performance by increasing efficiency, transparency, and investor participation. Despite these initiatives, market performance remains low, with key indicators such as market capitalisation, trading volumes, and liquidity showing declining trends. Empirical literature presents mixed results regarding the influence of these platforms on market outcomes, particularly in emerging markets like Kenya. This study therefore investigated the relationship between forex trading platforms and market performance, as well as the moderating effect of ownership concentration on the relationship between the independent and dependent variables. The study was anchored on Market Efficiency Theory and adopted a positivist research philosophy with a quantitative research design. The target population comprised 86 investment firms at the NSE, including investment banks, fund managers, investment advisors, insurance firms, REITs, and trustee managers. A census approach was used, with purposive sampling to select respondents. Primary data were collected using structured questionnaires, with validity ensured through expert review. Data were analysed using descriptive and inferential statistics, including correlation and regression analysis via SPSS version 26, and presented using tables. The findings revealed that bond trading has a strong, positive, and statistically significant effect on securities market performance (β = 0.886, p <0.05). However, ownership concentration, while significant as an independent predictor, showed a positive but statistically insignificant moderating effect (β = 0.743, p = 0.091>0.05), indicating that it does not significantly alter the relationship between trading platforms and market performance. The study concludes that bond trading platforms are critical drivers of securities market performance in Kenya, enhancing efficiency, liquidity, participation, and investor confidence, while ownership concentration plays a limited moderating role. The study recommends strengthening corporate governance frameworks, enhancing transparency, and protecting minority shareholders to ensure that ownership concentration supports rather than constrains market efficiency.