Minimum Number Of Shares You Can Buy On The Nairobi Securities Exchange (NSE)

The Nairobi Securities Exchange (NSE) provides an opportunity to invest in shares of different companies operating in different sectors of the economy. The market is open for both domestic and foreign investors, and it is the largest Exchange in East Africa. It is easy to get started with stock trading on the NSE.

To facilitate efficient and easy trading in stocks, the NSE has placed a cap on the minimum amount of shares that an investor can buy on the market. Investors on the NSE can buy a minimum of 100 shares. That cap is not only good for efficient trading, but also allows every ordinary person with interest in stock trading to enter the market.

Some stocks on the NSE trade for Sh2 or less a share, which means that with Sh200, one is good to go as an investor on the NSE.

CDS account

For beginners, you are required to open a CDS account to start trading on the NSE. A CDS account does not require money to open, but you have to complete a form known as CDS 1 and supply your identification (ID) card or passport to open the account. The shares you buy will be held in your CDS account, so it is like a bank account only that it stores shares not money.

Investors open CDS account through stockbrokers who then issue them with CDS account number. The stockbroker manages the account on your behalf. The stockbroker charges a small fee for the service of managing your account, but you have full control of your CDS account. In other words, the broker does not advice you on which shares to buy or sell, it is up to you to do your due diligence and instruct your broker to buy or sell particular stocks.

Benefits of shares investment

Investing in shares allows you to share profits in the companies you have invested. In addition to sharing profits through payouts known as dividends, you can also gain from the shares you hold if they increase in value. For example, if you buy shares today at Sh2 per share and then the shares increase in value to Sh5 a share in the next three months, you will have made a gain of Sh3 a share. You can imagine your profits if you held 100,000 shares.

Investors on the NSE can also use their shares as security to obtain a bank loan. You can use your loan to buy more shares or for other issues such as paying school fees for children.

Click HERE to read about how to open CDS account.