Kenya's Capital Markets are showing renewed momentum, with growing investor interest and notable listing announcements at the Nairobi Securities Exchange (NSE).
This momentum has been backed by a strong financial performance. The NSE reported a 134% increase in profit after tax in 2025, rising to Ksh 272.2 million. More significantly, total revenues surpassed Ksh 1 billion for the first time in the exchange's history, a 31% year-on-year jump signalling structural growth.
Against this backdrop, Family Bank Limited has been listed on the NSE by way of introduction, making it a good moment to understand what a listing means and how you can get involved.
What is a share?
A share is a piece of ownership of a company or enterprise. When you buy a share, you become an investor and thereby an owner of a piece of the company’s profit or losses.
What does it mean when a company lists?
Listing a company involves making available to the public shares of a public company through placing the shares on an official stock exchange. Contrary to common perception, listing doesn’t always involve selling shares to raise capital immediately; it can be about improving corporate governance, increasing transparency and building public trust.
There are three main ways a company can list:
Initial Public Offer (IPO): This is the most common type of listing. An IPO involves a company issuing new shares while listing on the selected stock exchange, which will result in a new set of shareholders from the public buying the shares at a specified share price, and hence the company raising capital from the exercise.
Listing by Introduction: This type of listing occurs when a company takes its existing shares and lists them on an exchange. The aim of listing by introduction is not to raise capital immediately, but to be able to do so later when the company needs capital. It provides the company with a regulated environment within which to operate and a platform to trade shares with the public investors in the capital markets.
Cross-listing: This occurs when a company that is already listed on one stock exchange decides to list on another stock exchange to have a larger scope of access to capital from different jurisdictions and different investors.
Why buy shares on the NSE?
Buying shares on the NSE is one of the most accessible ways to grow your money beyond a savings account. When you buy a share, you become a part-owner of a company, entitled to a share of its profits and the benefit of any increase in the company's value over time. Unlike fixed deposits, shares allow you to earn returns that outpace inflation.
The NSE also gives you access to some of Kenya's most established companies across banking, insurance, manufacturing, and telecommunications, all in one regulated marketplace.
How do you make money, and how much do you need to start?
Investors on the NSE make money from shares and bonds in two main ways. The first is through capital appreciation, which is the buying of shares at one price and selling them later at a higher price. The second is through dividends, which are a portion of a company's profits paid out to shareholders, usually annually or semi-annually.
As for how much you need, the barrier to entry is lower than most people think. The NSE introduced a single share trading rule allowing securities to trade in multiples of just one share, allowing investors to buy as little as one share, meaning you can start trading with whatever you can afford and build over time.
How to buy shares on the NSE
Buying shares on the Nairobi Securities Exchange (NSE) involves opening a Central Depository System (CDS) account through a licensed Central Depository Agent (CDA), which can be a stockbroker or investment bank. It is mandatory to open a CDS account to buy or sell shares of companies listed on the Nairobi Stock Exchange, either through a broker, online or mobile apps.
Once you have a CDS account, all you need to do is identify the assets you would like to trade and place an order for the shares you want, either through your broker directly or via their online platform.
Once the purchase is processed, the share should reflect in your CDS account.
How do you cash out?
To cash out your shares, you need to instruct your broker or initiate the process yourself through an online platform or mobile app by placing a sell order for the shares you own.
Once a willing buyer is matched and the trade settles, usually within two business days, the funds are credited to your trading account (CDS), from which you can withdraw to your bank account or mobile money wallet.
There is no lock-in period for shares traded on the NSE. You can sell at any time the market is open which is Monday through Friday, from 9:30 a.m. to 3:00 p.m. East Africa Time (EAT), excluding public holidays.
How long does it take to receive dividends?
When a company declares a dividend, it sets a cut-off date by which you must be a registered shareholder to qualify. Dividends are typically paid out within 30 to 60 days of that record date, either by cheque or directly to the bank account or mobile wallet registered on your CDS account. It is important to keep your account details updated to avoid delays.
What are the risks?
As with any sort of investment, this does involve some risk. The value of shares goes up or down because of market forces, the performance of the specific company and various economic conditions.
The best way to manage risk is through diversification. Spreading your investment across different companies and sectors rather than putting everything into one share. Starting with well-established, blue-chip companies is also a common approach for first-time investors.
What are the compliance requirements?
There are several compliance costs associated with trading shares on the NSE that, as an investor, you should be aware of.
These are:
- Brokerage commission- Your stockbroker charges a fee for executing trades on your behalf, typically a percentage of the transaction value.
- NSE levy and CMA levy - Small regulatory fees applied to each transaction.
- Withholding tax on dividends - Dividends paid to Kenyan residents are subject to a 5% withholding tax, deducted at source before payment reaches you.
- Capital Gains Tax (CGT): As of early 2026, it is set at 5% of the net gain on shares sold, which is typically deducted when trading.
What are the common beginner mistakes, and how do you avoid them?
- Investing money you cannot afford to lose - Only invest funds you will not need in the short term. Share prices fluctuate, and panic-selling during a dip often locks in losses unnecessarily.
- Following the crowd - Buying a share simply because everyone else has can lead to purchasing at inflated prices. Do your own research or consult your broker before making decisions.
- Lack of a trading plan – Before buying shares, you should do your research and consult a broker to outline a trading plan defining your goals, risk tolerance and market opportunities.
- Ignoring diversification - Putting all your money into one company or one sector is high-risk. Spread your investments across sectors to cushion against individual company downturns.
- Expecting instant returns - The stock market rewards patience. Many experienced investors hold shares for years to realise meaningful gains.
- Not tracking your investment - Check your CDS statements regularly, stay informed about the companies you hold shares in, and keep your account details updated for dividends.
A company’s listing is more than a corporate event; it is an invitation to be a part of an organisation’s growth journey. By researching and understanding how the NSE works and what listing means, you can invest with confidence and peace of mind.
