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All You Need To Know Before Buying Shares In Kenya

All You Need To Know Before Buying Shares In Kenya.

With the advancement of financial literacy in the country, the majority of Kenyans, particularly the youth, are now engaging in share trading as a means of future planning investment.

A share or stock is a unit of ownership in a company, and on the Nairobi Securities Exchange (NSE), it represents ownership in a portion of a listed firm.

Buying stock in publicly traded companies is one of the most common ways to make such investments.

Buying shares appears to be a simple process, but there are some important aspects to understand before getting into the share-buying business.

The roles of the Capital Markets Authority (CMA), the Nairobi Securities Exchange (NSE), and the Central Depository and Settlement Corporation must be understood in Kenya.

CMA
It is the government agency in charge of licensing and regulating Kenya’s capital markets.

It regulates, licenses, and supervises the activities of market intermediaries such as brokers, investment banks, investment advisers, fund managers, security dealers, and credit rating agencies.

CMA also makes it easier to mobilize and allocate capital resources to finance investments. The CMA was established as a statutory agency in 1989.

NSE

It is incorporated as a company limited by shares in Kenya and is in charge of developing the securities market and regulating activities.

The NSE facilitates the dissemination of market information to investors, such as price lists, material announcements, and other significant shareholder notices.

The NSE was established in 1954 as a voluntary association of stockbrokers in the European community registered under the Society Act in British Kenya.


CDSC

The organization was founded in Kenya in 1999 and began operations in 2004. It is a CMA subscriber and offers automated clearing, delivery, and settlement services for NSE transactions.

According to the NSE, owning shares means you own a piece of a publicly traded company, regardless of size.

In order to become a shareholder, an investor must purchase 100 shares of any publicly traded company. In other words, if a company’s stock is trading at Ksh28.05, you’ll need at least Ksh2,805 plus brokerage commissions.

Brokerage commissions are 1.8 percent on amounts greater than Ksh100,000 and 2.1 percent on amounts less than Ksh100,000.

This is negotiable in some cases with specific brokerage firms depending on the volume of shares purchased.

A shareholder, also known as a company owner, is someone who owns at least one share of a company’s stock.


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Shareholders are not personally liable for the debts and financial obligations of the company.

They are also not in charge of the day-to-day operations of the businesses in which they invest. The management of the listed companies is overseen by the boards of directors.

All You Need To Know Before Buying Shares In Kenya

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