In recent years, online trading of stocks and shares has become a hot topic, yet many still view it as a luxury exclusive to the affluent. However, this notion is rapidly changing, thanks to platforms like NSEasy, which is democratizing stock trading for all Kenyans. In a conversation with Rubin Mukkam Owuor, the Chief Operations Officer of NSEasy, we explored how this innovative platform is making it easier for Kenyans to invest in the stock market, regardless of their social or economic status.
Redefining Stock Ownership
Rubin highlights that NSEasy provides an opportunity for Kenyans to own a piece of some of the country’s top-performing companies. “It is a product that allows you to become an owner of big companies that you buy from every single day,” he explains. This straightforward approach eliminates the complex barriers that have traditionally made stock trading seem inaccessible.
The platform provides users with all the necessary tools and information to get started. But before diving into how NSEasy works, it’s essential to understand what buying stocks entails.
Understanding Stocks
At its core, buying stocks means purchasing a small ownership stake in a company. Think of it as owning a title deed to a part of that company. In Kenya, companies like Equity Bank, Safaricom, and Kenya Commercial Bank are publicly traded and partially owned by shareholders. The prices of these stocks can fluctuate based on various factors, including public perception, industry developments, and the basic principles of supply and demand.
The Evolution of the Stock Market
Historically, engaging in stock trading was cumbersome. Potential investors had to physically visit the Central Depository and Settlement Corporation, fill out extensive paperwork, and wait weeks for their accounts to be approved. Moreover, trading had to be conducted through a broker, making the process slow and often opaque.
However, the landscape has shifted dramatically with technological advancements. NSEasy has streamlined the process significantly. By simply dialing 66544#, users can open a Central Depository System (CDS) account using just their ID number and email address. The background checks performed by NSEasy are completed in less than 24 hours, after which users can begin trading stocks directly from their mobile devices without needing to know a broker.
What is a CDS Account?
A CDS account is essential for anyone looking to trade stocks and shares. It operates similarly to a bank account, allowing users to buy and sell stocks on the market. Without this account, engaging in stock trading is not possible.
The Role of Technology in Transforming Trading
The Nairobi Securities Exchange (NSE) aims to increase retail investment by encouraging everyday Kenyans to participate in the stock market. NSEasy plays a pivotal role in this initiative by simplifying the investment process.
Previously, investors had to buy a minimum of 100 shares. For example, if a stock was priced at KSh 15, an investor would need KSh 1,500 to participate. For higher-value stocks, such as those priced at KSh 140, the minimum investment would skyrocket to KSh 14,000. With NSEasy, however, individuals can purchase as little as one share, making it feasible for many more people to enter the market.
Introducing NSEasy
NSEasy is designed to bring stock trading to the masses. The founders recognized the difficulties many faced when trying to open a CDS account and the widespread misconception that only the wealthy could invest in stocks. They aim to change this narrative by promoting access to investment opportunities in well-known, everyday companies.
Rubin notes, “We buy credit or data bundles from Safaricom every day, power from KPLC, sugar from Mumias, and maybe alcohol from East African Breweries Limited (EABL). These are common companies we use, and for Kenyans to be stakeholders in these businesses makes sense.” By enabling Kenyans to invest in brands they already consume, NSEasy encourages a culture of ownership and investment.
Products and Features of NSEasy
NSEasy allows users to open a CDS account quickly, requiring only their ID number and email address. Following the background checks, the account is activated within a day. Once set up, users can link their accounts to the NSEasy platform and trade stocks using their M-Pesa wallet. This feature makes transactions seamless, allowing users to sell their stocks and receive funds directly into their M-Pesa wallets or to make purchases with ease.
For those who may already have stocks purchased through a broker, NSEasy can serve as a structuring platform. Users can track their investments and make trades based on the information provided by NSEasy.
Investment Accessibility
One of the most notable aspects of NSEasy is the low entry point for investments. Users can start investing with as little as KSh 100. Rubin recounts a story of a waitress who uses her tips to invest in stocks, highlighting how everyday individuals can engage in stock trading. This approach fosters learning and encourages users to experiment with different stocks.
Rubin emphasizes the importance of understanding the companies in which you invest. “It all comes down to your confidence in the companies you buy stocks in,” he explains. He advises new investors to start small and gradually increase their investments as they become more comfortable with market dynamics.
Navigating Market Fluctuations
Investing in stocks is not without risks. Stock prices can be volatile, leading to short-term losses. However, Rubin advises that holding onto stocks during downturns is often the best strategy. “If you have the ability to buy and hold a stock, it is the best approach,” he says. Understanding the factors that influence stock prices, such as company performance and market trends, is crucial for making informed investment decisions.
Plans for the Diaspora
Recognizing the importance of Kenyans in the diaspora, NSEasy is developing an app set to launch in January 2025 that will facilitate investments from abroad. In the interim, individuals in the diaspora can reach out through NSEasy’s WhatsApp channel to initiate trades.
The Future of NSEasy
Having been in operation for just eight months, NSEasy has received a license from the Capital Markets Authority and is now gathering valuable feedback from users. Rubin encourages potential investors to start today, emphasizing the long-term potential of stocks in the Nairobi Securities Exchange.
With established companies that serve Kenyans daily, investing in these stocks is a way to reinvest in the community and foster economic growth. “Why not put some of that money that you put into those companies back into your pocket?” he asks, urging Kenyans to become active stakeholders in the growth of their economy.
Conclusion
NSEasy is reshaping the narrative around stock trading in Kenya, making it accessible to everyone, regardless of their financial status. By leveraging technology, they are empowering Kenyans to become stakeholders in the very companies they support daily. As more people recognize the benefits of investing in local companies, the landscape of the Kenyan stock market is poised for significant growth, creating a more inclusive financial future for all.
