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17 Nov 16 Centum Investment Co. Ltd Unaudited Half Year Results 30 September 2016 ::read more

17 Nov 16 Williamson and Kapchorua Tea Ltd Unaudited Half Year Results 30 September 2016 ::read more

4 Nov 16 Safaricom Ltd Unaudited Half Year Results 30 September 2016 ::read more
 

 

 


       
 

Broking
 

 
  Trading Services

As a licensed Stock Broker at the NSE Standard Investment Bank offers our clients customized services including but not limited to the services explained below.

Through Standard investment bank brokerage services our clients are enabled to purchase and sell shares either in the Primary market when a company is being listed at the Nairobi Stock Exchange also referred to as an Initial Public Offering (IPO) or participate in active trading via the secondary market on the Nairobi Stock Exchange which involves transacting the ownership of shares by investors who already own them. 

Standard Investment Bank provides stock broking services through an experienced and dedicated customer service team trained to deliver personalized services that meet the individual needs of every client. We at Standard Investment Bank ensure that all transactions initiated by our clients are backed by verifiable orders to ensure the highest level of diligence.

EQUITY MARKET

This is a market in which shares are issued and traded through exchanges. Also known as the stock market. This market can be split into two main sectors:
  • Primary - where new issues are first offered (IPO)
  • Secondary – where all subsequent (normal) trading takes place.

At the Stock Exchange, Stock prices change every day as a result of market forces, i.e. share prices change because of supply and demand.

Trading hours and procedures
The main trading rules to note are the following:
  • Trading is conducted between 9:00am and 3:00pm each business day. 
  • The Chief Executive of the exchange may vary trading hours upon the occurrence of an event, halt trading on the exchange (market halt) or halt trading on any of the securities (security halt).
  • Each security’s price is limited to +10% and -10% daily movement unless there is a material announcement
  • On the day of a material announcement/ news, the share price has no limit ( daily limit is usually 10% more or less than the previous day`s average price)
  • All shares are settled three (3) days of trading T+3.


EQUITY PRICING

Primary market

A company issuing shares to the public will do so through an Initial Public Offer (IPO). The process involves identification of a Transaction Advisor, normally an Investment Bank.

The Transaction Advisor conducts/supervises all the procedures and obtains necessary approval as laid down by the Capital Markets Authority. He also carries out detailed valuation of the company to identify its worth thereby determining the IPO Issue price. The details of the offer are then published in a document called the prospectus which becomes publicly available on the launch of the issue.

Secondary market

Secondary market is the normal daily exchange of shares at the market price. This price understandably, is a result of supply and demand of shares.  What is difficult to comprehend is what makes people like a particular stock and dislike another stock.

The principal theory is that price movement of a stock indicates what investors feel a company is worth. This worth is influenced by the following factors;


(a) Company Profits:

The most important factor that affects the value of a company is its earnings. Earnings are the profit a company makes. NSE listed companies are required to report their earnings at least two times a year and publish the same in the newspapers. The Standard Investment Bank Research Department can provide these filings on notice when required.

(b) Corporate Actions:

These are events approved by the board of directors that bring material change to the company and affects its shareholders. Examples of corporate actions are:
  • Bonus – Profits Issued as stock that enables the company to keep cash on hand.
  • Dividends – Profits Issued as cash on a calculation per share affect cash in the company and thus price per share.
  • Stock splits - This divides each of the outstanding shares of a company, thereby lowering the price per share but maintaining the total value of the shares.
  • Share Rights Issue - A company implementing a rights issue is offering additional and/or new shares but only to already existing shareholders. The existing shareholders are given the right to purchase or receive these shares before they are offered to the public.
(c) Mergers and Acquisitions:

When a publicly traded company joins with or acquires another company.

(d) News (Materiality):

News released by a company that might affect the value of its securities or influence investors` decisions. Not rumours but news filed with NSE.

Consideration

(Transaction Value)

Up to Kshs. 100,000

Above  Kshs 100,000

Net Brokerage Commission   

1.78%

1.50%

Transaction Fees

CMA 

NSE 

CDSC

 

0.12%

0.12%    

0.06%

 

0.12%

0.12%    

0.06%

Investor Compensation Fund Fee

CMA

CDSC

 

0.01%

0.01%    

 

0.01%

0.01%    

Total Cost

2.10%

1.82%



Revenue Stamp

Above the transaction costs is there a revenue stamp cost applied of Kshs. 2 for every Kshs 10,000 Consideration.  Kindly note that consideration is rounded up to next Kshs 10,000 for this calculation.
 

 

 

 



               
  
NSE 20 Share
Index

 
stock PREV NOW %  
TOTL 16.50 18.05 9.39  
KAPC 80.00 85.00 6.25  
UCHM 3.70 3.90 5.41  
PORT 29.00 30.50 5.17