The Kenyan capital market has an estimated 90,000+ registered online traders trading forex and stocks.
This is no mean feat as Kenya ranks third in Africa behind Nigeria and South Africa on the list of African countries with the highest number of online traders.
Availability of mobile internet all over Kenya, advancement in modern technologies (like API protocols that allow trading apps of different platform providers and exchanges from different parts of the world to be able to communicate with each other).
Smartphones, local online trading Apps and responsible oversight of the capital market by the regulator- the Capital Market Authority (CMA) have also greatly contributed to the growth of the online trading ecosystem in Kenya.
Smartphone users can easily download trading Apps like Meta trader 4 alias MT4 by MetaQuotes Inc. from the forex & CFD brokers.
The Apps are packed with features such as automated trading, copy trading and market analysis capability; or the Online share trading (OST) App by Chelsoft which is very popular among Kenyan stock traders and brokers.
Trades can be initiated with a single click, a far cry from what was obtainable a decade ago when trades were placed via telephone calls.
A Delve into the Ecosystem of the Kenya’s Capital Market
Capital market in Kenya comprises of CMA (the Regulator), Central Depository/Settlement Agency (Central Depository & Settlement Corporation Limited (CDSC)), Approved Exchange (Nairobi Stock Exchange, NSE Kenya), Investment Banks, Credit Rating Agencies, REITs, licensed intermediaries (dealers, stock brokers, forex brokers, money managers, investment & fund managers, investment advisers).
NSE had been around since 1954. But, in 1980s, the Kenyan government felt that the existing financial system was too much dependent on commercial banks for long-term credit.
It became evident that they couldn’t support the desirable economic development goals and also economy mostly comprised of public enterprises (which had limited sources for funding and low public ownership) which was not sustainable for economic growth and development goals.The government wanted to increase the private sector’s role in the economy and broaden ownership of state-owned enterprises to the public and enhance capital market development.Current capital market wasn’t properly coordinated and equipped for this and better Capital Market structure was needed to bridge the gap and to bring together the lenders (investors) and borrowers (private companies and government enterprises).Hence, on recommendations of CBK (Central Bank of Kenya) and International Finance Corporation to strengthen and develop the financial sector, government decided to pass a bill […]