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Investing in stocks is one of the best ways to make money in Kenya. The stock market can make you rich if you know how to play your cards well.

The stock market has made millionaires both in Kenya and abroad. It is where WarrenBuffet, the greatest value investor of all time, made the bulk of his Sh 8 trillion net worth. With as little as Kshs 1000, you can start stock trading in Kenya today.

This article will provide you with a step-by-step guide to stock trading in Kenya.

Stock Trading in Kenya

How to Buy Shares in Kenya

Follow the steps listed below to begin buying shares in Kenya today.

Total Time Needed :

15

Minutes

Total Cost:

2000 KES

Required Tools:

– A Smartphone or Computer.

Things Needed?

– National ID or Passport
– Bank Account
– KRA PIN

Steps:

Step 1: Choose Stock to Buy

To choose the right shares, you need to understand what your risk profile is, what risk appetite you have, and what risk you are willing to face when buying and selling shares.
Once you understand what type of investor you are and what you can afford to lose, you need to research the companies in which you want to own shares. You can view a variety of fundamentals and conduct a technical analysis to understand the share prices, how and why they move.
Based on this, you can decide which shares are worth investment and build your portfolio. It is important to remember not to choose large stocks purely based on it being a brand name or a well-known company.

Step 2: Choose the Number of Shares to Buy

The least number of stocks you can purchase is 100 so you require adequate funds depending on the share you want to mark your entry with.

This may not be much in some cases. For example, if the share you’re buying is trading at KES 5.00, you’ll just need KES500.00!
You may, of course, need higher amounts if you go for shares with higher worth like the BAT or EABL shares.

Either way, start small.

Step 3: Choose a Stockbroker

Stockbrokers in Kenya

You cannot buy or sell shares directly on the NSE. You need a stockbroker that will facilitate your trade. Choosing the right broker will involve in-depth research of the market and professionals that offer their trading and investment solutions and options.

As a beginner, it is also important to select a broker that will provide you with the necessary training and education, helping you gain an understanding of the stock exchange, stock market, and the process involved with trading.

I use Faida Investment Bank since they provide me with both mobile and web trading platforms and charge no account opening or maintenance fee.

Step 4: Open a CDS Trading Account

Before you can start trading, you need to register a Central Depository System (CDS) account. This account will be unique to each investor, and it can either be opened by an individual or on a joint basis.

This account is like a bank account specifically for the stock and securities market, with the Central Depository and Settlement Corporation (CDSC) ensuring that all settlements are paid out.

When you sign up with Faida Investment Bank, for example, they automatically open a CDS account for you within 2-3 working days. You just need to provide them with your bank account details and they do the rest for you.

Step 5: Buy and Sell Shares

How to Buy Shares in Kenya - A step by step Guide

Once your CDS Account has been set up, you can now start buying and selling shares through your stockbroker. Simply log in to your trading account and start trading.

Wrapping Up

Investing in stocks does not guarantee returns/profits, and most likely will lead to having less money than you initially had. For beginners, my advice is that invest an amount of money you can afford to lose and as your investment expertise and knowledge grows over time, you can now trade larger amounts with confidence.

I hope you enjoyed reading this article by Brian Onuonga. Please consider checking my Bio for more details about me.

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