How to Invest in Stocks in Kenya?

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Investing in Stocks in Kenya

One of the easiest ways to grow your wealth is by investing in stocks. However, most people feel overwhelmed about where to getting started.

Perhaps you are one of them. Not to worry. This article is going to give you a step by step guide on how to buy your first stock.

Understand the lingo

For one, you need to understand the jargon of investing in the stock market. The most basic of them is shares. These are small units of ownership of a company that enables everyday people like you and me to invest in some of the most successful companies in the market.

For example, these small units, allow you to own a piece of Safaricom, KCB, among many other companies.

The other term you need to know is the Nairobi Stock Exchange (NSE). As the name suggests, it is an exchange where buyers and sellers meet to exchange “trade”. Here is where financial products like securities, bonds, currencies, derivatives, and in this case, stocks in Kenya are traded.

How to get started

To set the ball rolling, you will first need to open a Certificate of Deposit account (CDS). You can open it through a stock brokerage firm or an investment bank which is licensed by the Capital Markets Authority.

The CDS account is just like a bank account, but in this case, it allows you to store and trade in stocks.

What you need to open a CDS account

Firstly, you will need your original National ID or passport. Secondly, you will need to have two recent passport size photos. Thirdly, you will need to provide your PIN certificate from the KRA.

Note that the above requirements are for an individual.

If you would like to trade like a company, you will need the original certificate of incorporation of the company, the unique National IDs of the directors of the company, and their recent passport size photographs. Lastly, for a company, you will need to sign a CDS 1 form.

How to start trading

To get started, you will deposit money into your account. After that, you will give written permission of the shares you want your stockbroker to buy on your behalf.

However, if your stockbroker has an online trading platform, you can buy them on your own.

Something to note when buying is that the buying price of your chosen shares must be lower than the market price.

Being a new trader, it is wise to consult with your trader before buying to protect yourself from losses.

Also, note that the minimum number of shares you can buy is 100, and a fee applies whenever you are trading.

Finally, to make money, you can sell your stocks when they rise in price. 

Conclusion

Not all shares are created equal. You will need to do extensive research on the companies you want to invest in. For example, research on the company’s management, strategy, expansion plans, financial reports, among other factors. Our Company is a leading financial research firm in Kenya. We provide the latest data and credible information on the stock market.

Overall, do not sit on the curb. Dive in and start investing. You never know, you may turn out to be the next Warren Buffet.

How do I go about stock trading in Kenya? Get an Expert Advice

For more details on how to invest in stocks in Kenya, look no more. Finsolutions offers training and research reports as a starting point on how to be a viable trader. Contact us on info@finsolutions.co.ke, Phone +254 780216631

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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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