The Nairobi Securities Exchange (NSE) has unveiled an ambitious five-year strategy aimed at attracting 9 million active retail investors, both domestically and in the diaspora.
The plan, which kicked off in February 2024, is part of a broader effort to revitalize the stock market and boost participation.
Frank Mwiti, the CEO of the NSE, announced the strategy during an appearance on the Trading Bell Show. He emphasized the exchange’s commitment to mobilizing retail investors back into the market. This goal is particularly ambitious given the current state of the market where approximately 97.5% of the 1.5 million accounts used for trading securities, including shares, are inactive.
“We want to mobilize retail investors back into the market, both domestic and diaspora. Our target is 9 million active,”
Frank Mwiti, CEO of NSE
The NSE plans to modernize its market infrastructure and introduce new initiatives to attract and retain investors.
Key Initiatives to Revitalize the Market
- Fractional Trading: The NSE will enable fractional trading, allowing investors to buy portions of shares rather than whole units. This move is expected to lower the barrier to entry for retail investors with limited capital.
- New Products: The exchange plans to introduce new investment products, such as Exchange-Traded Funds (ETFs), and expand the availability of single-stock trading options.
- Agency Network Expansion: The NSE will roll out an agency network across Kenya and the broader continent to facilitate investor onboarding and provide support to new and existing market participants.
Market Performance and Investor Confidence
The announcement comes amid a strong rally in Kenya’s stock market.
Investor confidence has been bolstered by renewed interest from domestic investors. In the 10 months leading up to October 2024, investors at the NSE saw their portfolios grow by KSh 419.5 billion. Additionally, the secondary bond market experienced a remarkable turnaround, with turnover more than doubling to breach the KSh 1 trillion mark. Bond activity at the NSE surged by 139.8% to KSh 1.544 trillion in 2024, up from KSh 644 billion in 2023.
