STOCK MARKET
  • Its a financial market where investors buy and sell financial securities, most commonly ,equity shares of publicly listed companies.
  • An equity share is a unit of ownership in a company.
  • The stock market provides investment income to investors who purchase stocks.
  • Investment income can be through dividends  and share appreciation (capital gains)or both.
  • Also, the market provides capital income is companies through insurance of shares.
  • Public listed companies trade shares on stock exchanges. Examples of stock exchanges :

                              Nairobi stock exchange(NSE).
                              Uganda securities exchange.
                              Nigerian stock exchange.
                             Johannesburg stock exchange(JSE).

HOW TO TRADE SHARES ON NAIROBI STOCK EXCHANGE
       -Nairobi stock exchange is based in Kenya.
       -Founded in 1954.
       -NSE operates under the supervision of Capital Market   Authority of Kenya(CMA).
       -How to list on NSE click here .

To trade shares on NSE, an investor needs:
    1) A trading account(CDS account).
    – A CDS account is enables investors to hold or transfer shares traded at NSE.
 How to open a CDS account ,CDSC.

     2) Stock broker.
    – Stock brokers have an in-depth knowledge of the stock market.
    -Choose a broker who has a positive reviews from investors and offers attractive trading fee.

     A list of brokers in Kenya ,N.S.E listed brokers

      3) Money.
   -How much money does an investor require to start trading on NSE?
   – The minimum number of shares per counter an investor can trade is 100.

 Example 1:

 Buy Standard Chartered Bank(SCB) shares on 09/04/21

         *share price =142.75ksh and brokerage fee=2%

         To buy 100 shares of SCB,
          =(142.75*100)+brokers fee
          =1427.5+2% fees
          =1427.5*1.02=  Ksh 1,456.05.

   Example 2:
 Buy Ken Gen shares on 09/04/21.
*share price=4.54ksh and brokerage fee=2%(estimate)

          To buy 100 shares of Ken Gen
           =(4.54*100)=2% brokers fee
           =454*1.02
            =ksh 463.08.

       -Therefore, the amount of money an investor needs to start trading is determined by:
           *Number of shares to be purchased(minimum is 100 shares).
            *Brokerage fee/commission.

What  is brokerage fee?

Brokerage fee is the amount an investor is charged by a broker to execute specialized  services .The services can either be  advisory or transactional.

Trading Strategies: Long Trading vs Short Trading

Long Trading:

Involves buying an equity stock at a lower price and selling it a higher price. The exit action here is to sell the equity share(s) at a higher price to make a PROFIT.

For example:                                                                                                                                    Buy 100 shares of X  at  Ksh 20,hold and sell when the shares when the price goes up to Ksh25.

In this case,the profit will be;

100 share * Ksh(25-20) = Ksh 500 (before commissions).

Long trading is also referred to as “Going long” ,”Buying Long”.

Going Long on stock is profitable when the share price of a stock is rising.

 

Short Trading:

In short trading an investor borrows equity stock (from the broker) and sells it .

The exit action is to buy back the equity stock at a lower price (make a profit) and give it back to the broker.

Example:

An investor borrows 100 shares of X when the price Ksh 15 and sell immediately.

Investor receives Ksh 1500 in their account. The Investor’s account will reflect negative 100 shares (which will need to be returned to the broker).

 The investor exit action will be to repurchase the shares at lower price (less than ksh 15),lets say ksh 10.

If the investor buys back 100 shares of X at Ksh 10 per share, he will pay Ksh 1000.

That means, the profit is Ksh 500 before broker’s fee.

Short trading is also know as “Going short”,” Shorting a stock”.

Going short is profitable when the share price of a stock falls. 

 

Securities Africa Kenya Limited

N.S.E Listed broker

Global broker Securities Africa opens Kenya office Stock broking and financial services firm, Securities Africa Group, has launched a Kenyan subsidiary. Securities Kenya Ltd has been licensed by the Capital Markets Authority (CMA) and admitted as a trading participant at the Nairobi Securities Exchange (NSE). The group is a member of the global financial services firm Altree Financial Group, which has affiliatets in New York, London, Hong Kong, Johannesburg, Lagos and Bermuda. Securities Africa MD Michael Barnes on Thursday said with Kenya being the largest and most liquid regional market, it is an important entry point into the East African market. Establishing an on-the-ground platform in Kenya has always been a core consideration for Securities Africa. We are excited at the growth potential within the region and particularly Kenya, said Mr Barnes. The firm said it intends to position itself as the top brokerage by leveraging its local network of corporations, institutions, sovereign and retail investors. Securities Africa Kenya CEO Anthony Munyiri said: We have a focused business plan that not only intends to have a major impact on the Kenyan capital markets, but across the African capital markets as a whole. We believe that it is a very opportune time for Securities Africa Kenyas entry into the Kenyan capital markets, said Mr Munyiri. Source: Business Daily Africa

EFG Hermes Kenya Limited

N.S.E Listed broker

In Kenya, EFG Hermes has an on-the-ground team of talented brokers and analysts to provide global institutional clients brokerage services backed by award-winning emerging and frontier market research. The Firm’s presence in Kenya serves as an East African hub for access to and coverage of neighboring markets. EFG Hermes Kenya was established in 2017. Orbit Place, Westlands Road Nairobi, Nairobi 00623, KE

NCBA Investment Bank

N.S.E Listed broker

Mara Rd. Upper-hill P.O Box 44599-00100, Nairobi Kenya Mainline (Switchboard) +254 20 2884000 Customer Care Contact Tel: +254 20 2884444 Mobile: +254 711 056444/+254 732 156444

KCB Capital

N.S.E Listed broker

KENCOM HOUSE, 2nd Floor, Wing B, P.O. Box 48400 – 00100, Nairobi, Kenya

Equity Investment Bank Limited

N.S.E Listed broker

Value Creation Our relevance as a Group lies in our ability to create long-term value for our stakeholders and investors, provide differentiation while also increasing our own capitals.

Absa Securities Limited

N.S.E Listed broker

Renaissance Capital

N.S.E Listed broker

10th Floor, Pramukh Tower, Westlands Road, Westlands, Nairobi Kenya

African Alliance

N.S.E Listed broker

African Alliance Kenya Investment Bank Limited - Asset Management ​ Physical address 4th Floor Kenya Re Towers Upper Hill Off Ragati Road ​ Postal address PO Box 27639 Nairobi 00506

Kestrel Capital (EA) Limited

N.S.E Listed broker

Orbit Place 2nd Floor, Westlands Road. P.O Box 40005-00100

Standard Investment Bank

N.S.E Listed broker

16th floor JKUAT Building, Kenyatta Avenue, P.O. Box 13714 – 00800, Nairobi, Kenya Telephone: +254(0) 20 2277 000: Mobile: +254(0) 777 333 000: WhatsApp +254(0) 793 333 000 Email: info@sib.co.ke

AIB-AXYS Africa Ltd

N.S.E Listed broker

The Promenade, 5th Floor, General Mathenge Drive, Westlands, PO. Box 43676-00100 Nairobi, Kenya Call: +254-711047000/112 Email: info@aib-axysafrica.com Feedback: feedback@aib-axysafrica.com

Sterling Capital Ltd

N.S.E Listed broker

Sterling Capital Limited Delta Corner Annex,5th Floor, Ring Road, Westlands

ABC Capital Ltd

N.S.E Listed broker

ABC CAPITAL LIMITED — KENYA Head Office Mezzanine, ABC Bank House, Woodvale Grove, Westlands

Kingdom Securities Ltd

N.S.E Listed broker

Co-operative Bank House,5th Floor, P.O Box 48231 00100 Website :KSL

Suntra Investment Bank Ltd

N.S.E Listed broker

Suntra Investments Ltd 7th Floor, Nation Centre, Kimathi Street, Nairobi Kenya

Ngenye Kariuki & Co. Ltd. ( Under Statutory Management)

N.S.E Listed broker

( Under Statutory Management)

Francis Drummond & Company Limited

N.S.E Listed broker

Physical Address: Hughes Building, 2nd Floor (Kenyatta Avenue and Muindi Mbingu Street Junction) Postal Address: P.O. Box 45465-00100 (GPO) Nairobi, Kenya

Dyer & Blair Investment Bank Ltd

N.S.E Listed broker

Goodman Tower, 7th floor, P.O. Box 45396 00100 Tel: 0709930000.

Genghis Capital

N.S.E Listed broker

Our priority at Genghis is to consistently provide our current and prospective clients with value in the services we provide. It is for this reason that we lay emphasis on consistent and efficient service delivery.

Faida Investment Bank Ltd

Stock Broker

Faida Investment Bank Limited is a market leader in the Kenyan securities and capital markets, achieving consistent, unassailable top performance in secondary trading at the Nairobi Securities Exchange.

SBG Securities

Stock Broker

To be the leading securities firm in the East African region is our corporate vision and is adopted from the SBG vision

Dyer & Blair Investment Bank Ltd

Stock Broker

Dyer & Blair has been a pivotal player in the development and transformation of the local and regional capital markets through being a founder member of the Nairobi Securities Exchange (NSE), the Uganda Securities Exchange (USE) in 1997 and the Rwanda Stock Exchange (RSE) in 2011.

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