Introduction
The Nairobi Stock Exchange is currently a market with massive foreign investments and bargain opportunities. In recent years, most honest Nairobi stock exchange brokers would tell you that it has not been performing very well. Nairobi stock exchange brokers are aware that the situation is as result of many factors that have conspired to push stock prices to levels that are way out of the fundamentals on the ground.
Among the factors that most Nairobi stock exchange brokers quote as responsible for the low performance of the NSE is the weakened currency though it has begun to firm up against major currencies. Other factors include high fuel prices and a surge in liquidity levels prompted by heavy bank lending to the private sector. Inflation has also contributed to the problem of the NSE due to persistent drought.
Investors willing to try their hand in the NSE have to open an account with local Nairobi stock exchange brokers who will in turn open a central depository and settlement corporation account. CDSC accounts is where all eligible shares are electronically held.
Forms for account opening are usually available on the Nairobi stock exchange brokers websites. The investor will be required to fill in the forms and copies of passport-size photographs and a certified copy of tax return or utility bill, copy of driver's license or passport.
Once the Nairobi stock exchange brokers receive the above documents, they will activate the investor's account and communicate to them at the end of a full business day. Some Nairobi stock exchange brokers prefer to have the documents scanned and mailed to them especially when dealing with foreigner and then have originals followed later.
Nairobi stock exchange brokers mostly require approximately a 100 shares of any counter in order to trade comfortably for an investor. Most of them don't charge for CDSC accounts openings, some can handle very large trade sizes with low turnaround times.
Tips and comments
Nairobi stock exchange brokers should provide periodic statements which indicate the securities that investors hold with that particular broker at any given time. Dormant accounts get total portfolio holdings information through the emails every six months. The information is also transmitted at the end of the month as soon as there is activity on the account.
There have been concerns in the recent years about some of the companies associated with Nairobi stock exchange brokers failing. This is due to certain measures that have been taken in order to protect investors from unscrupulous Nairobi stock exchange brokers. Among the measures that have been taken in order to protect investors is introduction of automated trading system with more stringent capitalization and disclosure requirements.
As result of the minimum capitalization requirement imposed on all Nairobi stock exchange brokers, some of the smaller brokerage firms have been taken over by banks. At the same time investment banks which previously had not attained a 250 million threshold have been relegated to the stock brokers' status. On the other hand the government is keen to increase investor compensation but investors are also being informed on how to identify fraudulent stock brokers.
