Simulated online trading launched at the NSE

By Jackson Okoth

It will soon be possible for an individual to engage in trading at the Nairobi Securities Exchange (NSE), using a simulated virtual account.

The idea is to expose a potential investor to the real world of trading in shares at the bourse, complete with advice from a stockbroker and a blog offering a platform for investors to post any happenings or exchange ideas at the bourse.

All this is done from the comfort of one’s office or home, devoid of the usual pressures associated with real trading activities and the world of high finance.

“We are going to train and then open virtual accounts for those involved to enable them have a first-hand feel of what happens at the bourse,” said Willie Njoroge, Chief Executive-Kenya Association of Stockbrokers and Investment Banks (KASIB). This initiative is part of KASIB’s effort to encourage retail investors, most of who have burnt their fingers in the past, to participate in the exchange.

“The investor will be able to make decisions such as which counters to buy or sell while also consulting with a stockbroker,” said Njoroge.

Expectations in this training program is that after six months, one will have grown their portfolio and will then be motivated to switch from the virtual account into real cash.

Rocket science

The KASIB initiative is designed to demystify the NSE — and therefore negating the notion that trading in shares is rocket science — and create a safe environment where one can make mistakes and learn from them without incurring any losses.

“We will provide back-end qualified support and financial advice, such as things one should consider before buying or selling a stock,” said Njoroge.

Investors will also have access to qualified and practicing stockbrokers.

“This approach is more practical, has a real feel and allows those with issues about the stock market to address them,” said Njoroge.

Information given on the blogs will only be confined to what is already in the public domain.

“We will not disclose any material information that could expose the association to legal action,” said Njoroge.

KASIB is targeting a list of groups from university students and professionals to women groups, public transport operators, informal sector workers and youth organisations. This online platform will have flyers containing such information as reforms within the NSE over the past few months. The idea is to inspire confidence among investors on the safety of putting their cash at the bourse.

Public education

An effort by KASIB to conduct an aggressive public education through this online platform is coming at a time when activity at the NSE is on the rise.

Figures indicate that the NSE 20 share index has gone beyond the 4,000 points level, the first time in more than 16 months. But with activity at the NSE looking up, participation by domestic investors is still subdued.