CMA decries low stock uptake

By FRANCIS NGIGE
Only 10 per cent of adult Kenyans have invested in the stock market, the Capital Markets Authority says.
This has largely been contributed by lack of awareness among Kenyans on the importance of such investment or how the capital market operates.
As a result of the startling trend, CMA has started an investor education and a public awareness campaign in all the 47 counties.
Speaking in one of the forum in Nyeri, CMA Manager for Investor Education and Public Awareness Mr Kamunyu Njoroge said the authority is determined to see the number increase.
“Out of the 40 million Kenyans only five per cent are investing in the capital market with only 10 per cent of adult Kenyans involved,” said Njoroge.
The authority is targeting to raise the number to over 50 per cent, the official said.
Njoroge said exhibition clinics, which have already been held in Machakos, Nakuru and Eldoret among other towns are targeting people in the grassroots.
“ We have realised that there is lack of knowledge on the capital market. We want to dispel this notion that stocks are for the rich people,” said Njoroge.
The official who spoke at White Rhino Hotel during one of the clinic said CMA hope to raise the number of people investing in stock market at the end of the regional tours.
He said reforms are underway in the capital market industry to ensure that brokers and investment banks are strong companies that would not risk investors’ money.
“Some people do not know that with as little as Sh500 they can buy shares. We want to increase investors in bonds and shares,” said the official.
He added: “Investor education and public awareness has been identified as a key development of capital markets in the country. We therefore need to increase financial literacy and confidence.”
Njoroge said there was need for the public to appreciate the existence of huge investment opportunities available in the stock market and also know about the risks.
“ The exhibition are also intended to make the investing public to know their rights and responsibilities as well as roles of other capital market shareholders,” said Njoroge.
In Nyeri, residents lauded the new initiative saying it would encourage investment in the capital market.
A participant in the form Geoffrey Muchiri however said many people had developed fear after some stockbrokers collapsed with clients’ money.
“We may be keen to invest in the market but you remember in the past few years some stock brokerage firms have gone under putting clients investments at risk,” said Muchiri.