Nairobi Securities Exchange Chief Executive Officer Geoffrey Odundo at the trading floor on February 8, 2022. The bourse is seeking the return of retail investors whose accounts have been dormant the past two years. PHOTO | DIANA NGILA Only 61,000 of the 2.03 million share accounts at the Central Depository Settlement Corporation (CDSC) have participated in trading over the past two years, representing a three percent share.
Retail investors are individuals or non-professional investors who buy and sell securities through brokerage firms.
NSE chief executive Geoffrey Odundo told The EastAfrican that the majority of the dormant accounts belong to retail investors, some of whom made only the initial investments while others have cashed out.
Nairobi Securities Exchange (NSE) has stepped up a campaign to bring back retail investors after a trail of exits following trading malpractices, loss of funds in failed stockbrokerage firms and botched investments in initial public offerings, which left the bourse with dormant accounts.
Only 61,000 of the 2.03 million share accounts at the Central Depository Settlement Corporation (CDSC) have participated in trading over the past two years, representing a three percent share. This means that 97 percent of equities accounts have been dormant.
Retail investors are individuals or non-professional investors who buy and sell securities through brokerage firms. Their absence from the market has adversely impacted trading volumes and reduced revenues for the self-listed bourse and for stockbrokerage firms that rely heavily on transaction incomes.
It has also left trading in the hands of institutional investors — who mostly buy shares for long term returns — and foreign investors who are highly sensitive to the economic and political environment of the country. Institutional trade
NSE chief executive Geoffrey Odundo told The EastAfrican that the majority of the dormant accounts belong to retail investors, some of whom made only the initial investments while others have cashed out.
“What is driving volumes in Kenya is largely institutional trade and that is why we take the challenge that we need to do more to activate the retail investors,” said Mr Odundo
“These retail investors take profits in IPOs and stay out. So I think the challenge is how we get them back. Even if there is no IPO we need to get them (to) understand that there are still very good valuations in the market where they can come in and trade,” he added.
The Nairobi bourse and the CDSC have been sending targeted […]