There is a lot of discussion around
trading stocks and shares online
lately.
However, most people see this as a reserve for the wealthy but what if I say that, this perception is not true?
We had a sit-down with Rubin Mukkam-Owuor, the chief operations officer of NSEasy, a company that enables all Kenyans regardless of class or social status to own part of the best-performing local companies.
This, you can do through your phone and at the comfort of your home, office or even when hanging out with your friends.
In Rubin’s own words, “It is a product that allows you to become an owner of big companies that you buy from every single day.”
The platform provides you with all the tools and information you need to get set and start trading. Let’s first understand what stocks are;
What is buying the stocks all about?
Think of stocks as a title deed. There are companies like Equity Bank, Safaricom, Kenya Commercial Bank, among others that are partly owned by the public. A share or stock is a title deed to a small part of that company.
Prices of stocks or shares could for example be affected by many things including public perception, and industry factors among others but it is essentially a demand and supply thing. The more the demand of a particular stock, the higher the price.
How was the stock market then compared to now?
A lot has changed. What you would have to do previously is go to the Central Depository and Settlement Corporation and apply for an account with your passport photos, copies of your ID documents and other official documents and then wait for a couple of weeks for your account to be opened and then start trading stocks.
Even when you did start trading stocks, you would have to do it through a broker, you couldn’t do it directly.
Now with the introduction of technology, all of these things have changed. With NSEasy for example, all you have to do is dial *665*44# our USSD Code and you can open a CDS account with only your ID number and email address.
Then we run our background government checks and it goes through a process which takes less than 24 hours.
You will have your CDS account and then you can trade stocks or shares. You don’t have to know any broker. You do it all on your phone and you have complete control over the process.
What is a CDS account?
This is an account that you require in order to trade stocks and shares, without it you can’t really buy anything on the stock market. Think of it as a bank account that allows you to send money to your friends or contacts.
How has technology transformed the stock market over the years?
The NSE is trying to increase retail investment in the stock market and so we have institutional investors, those are big companies that come and buy lots of shares but what they really want is for the average Kenyan who is already a stakeholder in these companies to also invest in stocks.
We as NSEasy are trying to ease that process. Or instance, back in the days, you could only buy a minimum of 100 shares and this means if your stock was valued at Sh15, you’d need Sh1,500 buy.
If your stock is from a more valuable company and valued at Sh140, in order for you to invest you’d have to have Sh14,000 to invest in that company because of that minimum requirement.
Now with technology, you don’t have to buy a minimum of 100 shares. If you wanted to buy just one share, you could and that change has encouraged more lay people like us to be able to invest in the stock market.
Tell us about NSEasy?
It is a technological platform and what we wanted to do is bring stock trading to the masses. We realized even from our own experiences how difficult it was to open a CDS account unless you knew somebody or a broker who had information, you couldn’t trade stocks.
There has been a perpetuation of this image that only the ultra-wealthy can trade in stocks but we wanted to change all of that because all companies listed in the Nairobi Securities Exchange are local companies that we use every single day.
You buy credit or data bundles from Safaricom every day, power from KPLC, Sugar from Mumias and Maybe alcohol from the East African Breweries Limited (EABL) every day.
These are common companies we use and for us Kenyans to be stakeholders or own a small part of these companies makes sense.
It should be diverse, it shouldn’t only be limited to big institutions that are able to invest r wealthy people. I think of it as putting a little money you into those companies back into your pocket because as a shareholder, you can earn dividends.
NSEasy is a platform that brings all that to the masses.
What are some of the products NSEasy offers?
We allow you the ability to open a CDS account and all you need is your ID number and email address. We run background checks on you and we open your CDS account within one day.
That CDS account is what you need to buy and sell stocks. Once your CDS account is open we link it to our platform and you can then buy and sell stocks on our platform using your MPesa wallet.
You can sell your stocks and receive that money directly to your Mpesa wallet or if you want to buy stocks the money goes out of your MPesa wallet. That’s the main form of payment.
Can I use NSEasy if I have already bought stock?
Absolutely. You can lose your brokers number and use NSEasy as your structuring platform. We send you information about different companies and then you can use that information to decide if you want to trade or not. We don’t provide advice.
How much can I invest?
Our first customer invested Sh100 in KCB shares. It’s as low as that and one of our most active customers is a waitress who uses her tips to in vest in stocks.
She is new into stock markets and she is learning about it and experimenting by investing in different stocks.
It all comes down to your confidence in the companies you buy stocks in and at the end of the day you have to believe that they have inherent value, industries they are in will continue to add value in coming years.
You don’t need a lot of money to stocks at the NSE.
How do I get into stocks trading on NSEasy?
I would first ask you if you are a consumer of the listed companies in the Nairobi Securities Exchange and what you know about them and whether you’d like to be a stakeholder.
If the answer is yes, all I would need from you is your ID number and email address, we will then submit your information on the USSD code and you’d be able to open your CDS account within hours and you could start trading.
What I would advise you is to trade small, start with a very small amount of Sh100, Sh200 or Sh500 and try to learn how it performs over the coming weeks or months.
All these different news we read or hear about companies affects their stock price and once you understand this relationship you can start to invest more and realise it is an alternative way of investing.
There are cases of people losing money on NSE?
What we advise our customers is to keep abreast of all news and all official reports that are released by companies and information that helps you make an informed decision.
If you have the ability to buy and hold a stock, it is the best approach because there will be short-term dips in price. Stock prices fluctuate. Hold on to your stock and let that price appreciate over time.
Do you have products for people in diaspora?
We are creating an avenue for the Diaspora to also invest in the NSE via our platform. We will be creating an App which will be coming sometime in January 2025.
For now, what they can do is message through our WhatsApp channel provide their information for us to be able to activate their trades for them.
How long have you been in operation?
We have been in operation for the last eight months. We got a licence from the Capital Markets Authority to experiment with our product and we have our full approvals from the regulatory authorities and we are now testing the product with a number of different customers and we received positive feedback and that why we decided to take this product to everyone.
Final remarks to potential investors?
Start today. The long-term potential of stocks in the Nairobi securities exchange will only improve over the years. All these household brands are well established and have good reputation in this market, companies that serve Kenyans every day.
Why not put some of that money that you put into those companies back into your pocket? Why not become a voice that could influence how these companies continue working over the coming years?
Start today, start small, learn how
the stock market works and then
continue to increase your investment in the stock market so that all
of us Kenyans can be true stakeholders in Kenyan companies.
