This archive report was first published on 4 December 2019.
Kenya's Stock Market: A Call for Greater Transparency ¶
Kenya has experienced significant economic growth over the past 20 years, with millions of Kenyans benefiting from increased access to government services, higher incomes, and greater purchasing power.
However, despite this growth, foreign investment in the Nairobi Securities Exchange (NSE) has dropped to 70%, and only 4% of Kenyans invest in companies listed on the NSE, according to an Oxford Business Group study.
The study attributed this low investment rate to a lack of awareness, which highlights the need for greater transparency in the stock market.
Currently, the NSE charges Sh133,980 per month or Sh20,000 per month for access to real-time stock prices, while historical data is hidden behind a paywall.
Contrastingly, in other countries, such as Singapore and Taiwan, real-time and historical data is provided for free, making it easier for investors to make informed decisions.
Kenya's stock market is not meeting the minimal requirements of a weak form efficient market, where all historical prices are available for analysis by investors.
As a result, the market is dominated by the rich and connected, rather than the general public.
To address this issue, the Capital Markets Authority should force the public disclosure of all real-time and historical securities data online and partner with online platforms for financial information, such as Yahoo Finance.
By doing so, Kenya can attract more investors, particularly in the diaspora, and create a more inclusive and transparent stock market.
