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How I would invest Sh1 million

By Winnie Makena | November 11th 2020

With the pandemic and the resultant economic meltdown, it is little wonder that anyone with spare money to invest would be cautious about making an investment.

We asked a few business people where they would put a million shillings in the current economy.

1. Emmanuel Ngala,28, Independent financial advisor and communications consultant
With the prevailing Covid-19 pandemic investors should be keen on where to invest. I believe Fixed income securities are the best option as they give guaranteed returns, stocks are a good option but due diligence is imperative given the volatility of the market especially at this time.

 2. Mercy Waweru, 26, financial consultant
I am more of what you'd call a risk averse trader. I think I would split the Sh1 million into 3. First part would go into Money Market. Why? These tend to have a return rate of 8-11 per cent depending on the fund. I'd put in about Sh300,000.

The second batch would go into the banking industry. It has really been affected with this pandemic and most of their stocks are down from usual trading point. I'd use Sh400,000 to purchase stocks for various banks in Kenya through the NSE. The stocks are a long term kind of investment, about a year or two.  To give you an example, Stanchart was trading at Sh220 pre-Covid but is currently at Sh145-160. That would be a 40-50 per cent gain should it go back to its original trading point. The same is happening to Equity, KCB, DTB.

The last Sh300,000 I would be an angel investor for ladies in the slum who want to start businesses but lack the financial capacity. I am a strong advocate for women empowerment because it helps solve other social and systematic problems like domestic abuse. If these women can create businesses, they will be able to leave their bad situations.

 3. Kahianyu Kamau, 28, agri-businessman
I would start a water-vending business. With prime location, good placement and vigorous marketing, you’ll have struck gold. I tried to start one a few months ago but the money for licensing was what held me back. You have to pay the county council of Nairobi then NEMA, WARDA among others. You need about five licenses and the least expensive one of them is Sh50,000 for a small establishment.

 4. Samir Dave, 40, retiree
If I had Sh1 million to invest, I would put it into a mobile fruit business. Alternatively, I could set up a vegetable canning unit. This venture would work by mopping up the surplus fruit and vegetable supply at present.

 5. Ivix D Kioi, 28, corporate and fashion emcee
That’s a great question. I consult in digital media so I would set up a proper digital and communications consultancy firm. The reason is especially in this Covid-19 era, digital is big business, since everyone will need to either adapt to reaching their audience online, or losing them and dying. The rest of the money would go into buying equipment to enable us serve our customers better for the internet service provision company that my partners and I run.

6. Bill Omondi, 24, businessman
I would buy green bonds. These are bonds created to fund projects that have environmental and climate benefits. The majority of the green bonds are green “use of proceeds” or asset-linked bonds. I prefer them because they are the most secure investments I know that give high returns. They are also quite secure. Alternatively, I would use the whole amount in agriculture, which when you look at it, isn’t that much for the investment.

7. Andrew Okamar, 27, network and endpoint security engineer

A million might seem like a lot of money but it’s not. Having said that, I’d have to weigh a couple of options. First instinct would be to understand how money markets work and take a risk in something like Bitcoin for instance.

Two, since I consider myself a solution giver and a tech innovator, I’d invest in one of my many application development ideas. Look for young talent that can help me accelerate my ideas while I pay them a retainer of, let’s say, Sh25,000 for a period of about six months before the estimated time of having the product ready for the consumer market. Besides that, I’d also consider farming because food security is still a challenge in this part of the world.

8. George L Munene, 24, law student

With Sh1 million, I would find a suitable, secured investment such as M-Akiba. M-Akiba is a government-issued retail bond. It is a viable opportunity to save money through your mobile phone while at the same time earning very attractive interest rates from the government. I would then plough back the earnings. But I would only save three quarters of the money. The other Sh250,000 I would buy some shares in a competitive company just to diversify my investment. 

 What a veteran stocks investor says:

Alois Chami has shares in a majority of the listed companies and has been trading for over 40 years now. He says this about investing in stocks. 

 If you get a bit of capital, invest in the stock exchange. Start with at least Sh50,000. You only give the money to the stockbroker; they trade for you and give you the profits later on.

Once you give out your money, you become a sleeping partner and the company becomes active. Later on you get profits and dividends. The initial capital you gave, which is your money, is protected.

Nowadays, there are regulations from the CMA and the NSE that protect shareholders in case a company goes under.

If you want to start from scratch, approach any stockbroker for advice. We depend on them for whatever we do; buying and selling.

Nowadays, they are found within banks, which have taken over stock broking through subsidiaries and it is the best way because they keep money and cannot be broke.

If the stock broker is weak, the bank supports the brokerage side with its own money, unlike before when it was done by companies owned by individuals who would sometimes lose money. Banks have departments to advise you and departments of selling and buying.

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