Guide on how to buy shares in kenya

Investing in shares is an excellent way to grow your wealth over the long term. However, buying shares can be a daunting task, especially if you're new to investing. In this step-by-step guide, we'll take you through the process of buying shares in Kenya.


Step 1: Get a CDS account The first step to buying shares in Kenya is to open a Central Depository System (CDS) account. This account will hold all the shares you purchase and ensure that they are secure. To open a CDS account, visit any stockbrokerage firm in Kenya, such as:

1. AIB-AXYS Africa Limited P.O. Box 43676 -00100, Nairobi

2. Kingdom Securities Limited P.O. Box 48231-00100, Nairobi

3. Old Mutual Securities Limited P.O. Box 50338-00200, Nairobi

Ask for the forms needed to open a CDS account.

Alternatively you can visit your bank and tell them you want to buy shares they will advice your on a good stockbrokerage firm or refer you to their subsidiaries that deal with stocks.

Get the full list of capital markets authority regulated stock brokers.

Requirements

  • You need two recently taken passport size
  • photographs
  • original National ID or passport.
  • You need to sign the form (CDS 1) before your Central Depository Agent (CDA)


    • Once you have opened a CDS account with your preferred stockbroker the wait time is usually 2 weeks to 4 weeks.When your account has been opened you will receive a message that your account was successfully opened accompanied by your CDS account number.

    FREQUENTLY ASKED QUESTIONS about CDS accounts

    Step 2: Fund your account Before you can buy shares, you'll need to fund your CDS account. You can do this by transferring money from your bank account to your CDS account through your stockbroker. You'll need to provide your stockbroker with your CDS account number and the amount you want to transfer or transfer the funds using mpesa. A paybill will usually be provided.

    Step 4: Place an order(Buying the actual shares) One way of placing orders is by requesting your stockbroker to purchase specific shares on your account on your behalf or purchase the shares directly through an online trading platform or application provided by your stockbroker.

    Shares in kenya are bought in lots of 100. meaning that if you want to buy Safaricom plc shares you need to buy 100 of them at your specified price.On 10th May Safaricom's share price is 15.30 ksh. So you will need 1,530 ksh to buy the shares. Buying shares attracts brokarage fees and other charges.

  • Brokerage Commission
  • CDSC Transaction Levy
  • CMA Transaction Levy
  • CDSC Guarantee Fund
  • NSE Transaction Levy
  • CMA Guarantee Fund
  • Stamp Duty Charges


    • When you buy the shares they will be added to your portfolio.

    Step 5:Monitor your shares After you've purchased your shares, it's important to monitor their performance regularly. You can do this by logging into your CDS account and checking the value of your shares. You can also keep up to date with news and developments that may affect the performance of your shares.

    Buying shares in Kenya is a straightforward process that requires a CDS account, a stockbroker, and funding. By following these steps and keeping an eye on your shares' performance, you can grow your wealth over the long term. Remember to do your research before investing in any shares and seek professional advice if you're unsure about any aspect of the process.