How to invest in Shares in Kenya

ByElizabeth Atieno

Jun 12, 2023
How to invest in Shares in Kenya

This article shows you how to invest in shares in Kenya. Investing in shares can be a great way to grow your wealth over the long-term. In Kenya, the Nairobi Stock Exchange (NSE) is the primary market for trading shares. If you’re interested in investing in shares in Kenya, this guide will provide you with the essential information you need to get started.

So, how do you go about investing in shares in Kenya? Here are some steps to follow:

Step 1: Understand the Basics of Shares

Before investing in shares, it’s important to understand what shares are. A share represents a portion of ownership in a company. When you buy a share, you become a shareholder in that company. As a shareholder, you’re entitled to a portion of the company’s profits, called dividends, and you can also vote on important decisions that affect the company.

Step 2: Open a CDS Account

To invest in shares in Kenya, you’ll need to open a Central Depository System (CDS) account. This is a digital account that allows you to hold and trade shares electronically. You can open a CDS account through a licensed stockbroker or investment bank.

Also Checkout: how to invest in stock market in Kenya

Step 3: Choose a Stockbroker

To buy and sell shares on the NSE, you’ll need to work with a licensed stockbroker. A stockbroker is a professional who acts as an intermediary between you and the exchange. They’ll help you place orders and execute trades on your behalf. When choosing a stockbroker, look for one that is reputable and has a good track record.

Step 4: Research Companies

To make informed investment decisions, it’s important to research the companies you’re interested in. Look at their financial statements, annual reports, and other relevant information to get a sense of their financial health and growth prospects. You can also consult with a licensed investment advisor for guidance on which companies to invest in.

Step 5: Place Your Order

Once you’ve chosen a company to invest in, you can place your order through your stockbroker. There are two types of orders: market orders and limit orders. A market order is an instruction to buy or sell shares at the current market price. A limit order is an instruction to buy or sell shares at a specific price or better.

Step 6: Monitor Your Investments

After you’ve made your investment, it’s important to monitor your shares regularly. Keep track of the company’s performance and any news that may affect its stock price. You can also consult with your stockbroker or investment advisor for guidance on when to buy or sell shares.

In conclusion, investing in shares in Kenya can be a lucrative way to grow your wealth over the long-term. By understanding the basics of shares, opening a CDS account, choosing a stockbroker, researching companies, placing your order, and monitoring your investments, you can make informed investment decisions and achieve your financial goals.