How much do I need to start investing in NSE stocks in Kenya?

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Investing in stock is an excellent way of achieving financial freedom through growth and stability. Investing in NSE stocks entails buying shares in companies that have been listed like Safaricom, Kenya Airways, ABSA, KCB, etc. which then entitles you to be part of that organization’s earnings.

But how much do you require to open an account, start investing and start earning in NSE stocks Kenya?

The minimum amount required to invest in NSE

The least amount you will need to open an account in NSE Kenya will vary from broker to broker. Some brokers have set $2,000 as the minimum, while others have not set the minimum amount.

Most brokers will charge you Sh 1200.00 for the account opening and Sh100 per month to keep your account active.

It is important to mention that you cannot invest in NSE without a broker unless you want to be a broker yourself.

But again, when you decide to buy stocks, you must buy at least 100 shares per transaction. Implying that the minimum investment amount will be determined by the price of the stock you want to buy. Therefore, the minimum amount to start investing can be Sh 3,000, Sh 5,000, Sh 100,000, etc.

You can check the current share price of the listed companies on the NSE website.

Commissions and fees

As mentioned above, you cannot invest in NSE without a broker. Therefore, every time you buy and sell a stock, you will be charged 1.78% of the total trade value as commission to your broker. The 1.78 percent also include various taxes and fees that need to be paid.

Let’s do the math

At the time this was being written, Kenya Power & Lighting Company Ltd was trading at Ksh 2.14 per share. Therefore, to invest in this company, you will need a minimum of Ksh 217.81

Ksh 2.14*100 shares + 1.78% commission and fees= Ksh 217.81

Also, if you were to invest in Jubilee Insurance at this time, which goes for Sh 279.00 per share, you will need a minimum of Ksh 28, 396.62.

Ksh 279.00*100 + 1.78% commission and fees= Ksh 28, 396.62

You can look at the “last traded price” column on the NSE page to know the current price of a share and do the math to see how much you need to start investing in NSE in the company of your choice. Again do not forget the account opening fee and the monthly maintenance fee.

Note that:

A low share price doesn’t automatically imply that a stock is a bargain. Also, a high share price doesn’t imply a stock is overvalued.

The price of a stock is determined by a number of fundamental factors, such as (but not limited to) the company’s earnings, net asset, dividends, price earnings ratio, and potential growth.

Where to start investing in NSE

It is important to have in mind that investing in stocks doesn’t mean a guaranteed return.

So, what can be the best move for you is to invest a small amount, preferably in a company that you are well familiar with and then learn from that. As you continue understanding the market, you can then buy more stock with increased confidence.

Do you want to learn more on stock trading of NSE Stocks. Email us at info@finsolutions.co.ke and get more information on how to become a perfect investor and trader.

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About Author

Anthony Kiratu is the Founder of Finsolutions. He is a financial analyst with over 5 years experience in research, investment advisory, valuation and financial modelling. Anthony is a member of the Institute of Certified Investment and Financial Analysts and Institute of Certified Public Accountants of Kenya. He is passionate about development of African Capital Markets through training of investors and dissemination of information for sound financial and investment decision making process. He is also a part-time lecturer in the Certified Investment and Financial Analyst course in the subjects of International Finance, Portfolio Management, Equity Investment Analysis, and Fixed Income Securities. Email: anthony@finsolutions.co.ke Contact: +254 780216631

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