Shares are financial instrument where one owns stake of a company. Returns on shares are neither fixed nor guaranteed but when a company performs better, dividends are guaranteed. In this article we shall look at three main steps you should follow when buying shares in Kenya
Shares are important financial securities for any Kenyan who want to join investment world. The process of buying shares in Kenya can easily be done in 3 steps, which involves a stock broker or investment bank and an investor.
At the end of every financial year, companies declare their profits or losses; the shareholders then receive dividends according to amount invested in those companies.
However companies may not issue dividends if the profit posted is send on expansion or when the company incurs loses.
There are several attractive investment options in Kenya which the rich are conversant with: Investing in shares, bonds, money market, financial derivatives, trading in commodities such as oil,diamond,and gold, forex markets, importing and selling cheap cars, real estates, are some of the financial securities and business options that make them extremely rich.
Three Main steps To Follow When Buying Shares In Kenya
To get started with buying of shares, the following process should be followed;
Decide on the company to invest in.
Because buying shares is making an investment, the first step should begin with deciding on the company to invest your money with. Financial stability and future projection of the company should be a guiding factor to help anybody who intends to buy shares with any company.
Select a Stockbroker/Investment bank
A stock broker or an investment bank is the major two players in the stock market industry that are allowed to transact on your behalf.
Some of the best companies stock brokers and investment banks include: NCBA Bank,Kingdom Securities,CFC Stanbic bank and Kestrel and Suntra investment bank among others.
With as little as Sh.1,000 per month you can invest in shares and bonds
Open a Central Depository System (CDS) Account
Now that you have identified the company you want to invest in and you have a stock broker, its time to open a CDS account. The Central Depository System acts as the investor’s securities holding and trading account. This will help you make transactions when need be.
The account will also help you make transactions whenever there is a need.
Also Read:Co-operative Bank Kenya Branch Codes
Benefits Becoming A shareholder
As a shareholder you get to earn dividends from the company at the end of the financial year when the company posts profit.
You can also decide to sell your shares at any time. To maximize your profits, it is advisable to sell your shares when they are trading high and have gained more value.
Shareholders get to rip big when the value of the share grows. This way you are assured of getting the returns on your investment.
Another benefit of buying shares is that your money works for you. You will not be directly working with the company yet you will be enjoying the profit posted by the company.