In this article, we are going to look at how to buy shares in Kenya, among other things.
As you all know, investing in shares is one way of making your money work for you. It requires one to buy shares from publicly listed companies in the Nairobi Securities Exchange(NSE).
Such as CDS account, the minimum amount required to invest in stocks, selling your shares, selection of shares to maximise returns.
How to Buy Shares in Kenya: Beginners Guide to Investing
What do shares mean?
The words share, and stock is used interchangeably to refer to a unit of ownership of a given company.
When one buys stocks of Safaricom, it means that at the end of each financial year, they share in the profit and loss of Safaricom.
To invest in stocks in Kenya, one is required to own an active CDS account.
A CDS account enables one to buy and sell shares quickly without being physically present at the Nairobi Stock Exchange office.
What therefore is a CDS account?
A CDS account allows settlement and clearing of investors funds through providing central and safe custody. It is a fundamental requirement for everyone who would like to trade in shares in Kenya.
Therefore, if you are looking into opening a CDS account, here are a few things you should have to open a CDS account.
Related: How to Open a CDS Account in Kenya.
If you are opening as an individual:
- Two recent passport size photos,
- ID/Passport (Original)
- Complete and sign CDS 1 form
- Ksh 1200 to open the account and Ksh 100 (monthly fee)
If a company/ Organisation
- Certificate of registration
- The ID’s or passports of the directors
- Recent passport size photos of the directors
- Complete and sign CDS 1 form
How do I buy shares in Kenya after opening a CDS account?
There are three main ways of buying shares in Kenya;
- A financial adviser or an investment manager
- Stockbroker
- Online platforms – One can buy by themselves, or they may engage a broker
It is, however wise if you are just beginning in this trade to try and learn as much as you can about the industry and trade before venturing out.
Related: How to Buy Shares in Kenya.
All the three avenues suggested above for buying shares charge fees in one way or another.
While doing your homework, it is important to make sure that the method you choose cuts down most of the implicit costs and gives you maximum return.
Moreover, it is essential to keep in mind that the minimum amount of share that one should buy while starting is 100 shares.
Dependent on the share value, the minimum amount one requires would be between KSH 5000 t0 KSH 10,000.
List of trading stockbrokers at the Nairobi Securities Exchange(NSE)
About 24 stockbrokers are trading at the NSE currently. Some of these 24 stockbrokers have online platforms whereby an investor could log in and trade by themselves.
You may also be interested in the Beginners Guide to Online Stock Trading in Kenya.
Some of these stockbrokers with online platforms include:
- Faida investment bank – this bank exists sorely to link investors to wealth creation avenues. It has both an online share trading account and equity training account which one could choose to subscribe to.
- AIB capital – this firm ensures that you have someone guiding you in the process of buying shares.
- NIC securities – The coolest thing about this online platform is that it also has an application which one can download and trade-in share through their mobile phone.
- SBG Securities – It’s owned by Stanbic bank and its been in the market for a while now. If you are at trading with a secure online platform, please try them out.
- Dyer & Blair – Among one of the oldest investment companies in the market. It has over 60 years in existence, translating to better chances of getting the best advice from this platform.
Happy investing to you, I wish you the best of success!
