Investing in shares on the Nairobi Securities Exchange (NSE) has become more accessible to ordinary Kenyans with the introduction of Ziidi Trader, a service that allows users to buy and sell listed shares through the M-PESA ecosystem.
For many first-time investors, buying shares may seem complicated because of brokerage accounts, CDS accounts and trading platforms. Ziidi Trader is designed to simplify the process by allowing eligible users to access NSE-listed shares through their mobile phones.
Here is a step-by-step guide on how to buy shares using Ziidi Trader.
What is Ziidi Trader?
Ziidi Trader is a digital share-trading service that enables users to trade shares listed on the Nairobi Securities Exchange.
The platform allows investors to view available shares, place buy and sell orders, monitor their investments and manage their portfolios digitally.
This means that investors do not necessarily have to visit a traditional stockbroker’s office to place a share-trading order.
How to Buy Shares Using Ziidi Trader
1. Open the M-PESA app
Start by opening the M-PESA app on your smartphone. Make sure you are using the latest version of the application.
Navigate to the financial services section and look for Ziidi Trader.
2. Access Ziidi Trader
Select Ziidi Trader and follow the instructions provided on the platform.
If you are accessing the service for the first time, you may be required to complete registration and verification before you can begin trading.
3. Select the company
Once you have accessed the trading platform, you can browse the companies whose shares are available for trading on the NSE.
These may include well-known listed companies such as Safaricom, Equity Group, KCB Group, ABSA and other NSE-listed firms.
Before buying, it is important to research the company rather than simply choosing a share because it is popular.
4. Select “Buy”
After choosing the company, select the Buy option.
You will then need to enter details such as the number of shares you want to purchase and the price at which you are willing to buy.
Depending on the available options, you may be able to place an order at the prevailing market price or specify your preferred price.
5. Enter the number of shares
Suppose a share is trading at KSh 20 and you want to purchase 100 shares.
The basic value of the transaction would be:
100 shares × KSh 20 = KSh 2,000
However, remember that applicable transaction charges may increase the total amount required.
6. Review your order
Before confirming the transaction, carefully review the details.
Check the name of the company, number of shares, purchase price and estimated transaction cost.
This is particularly important for first-time investors because once an order is submitted, its execution depends on the conditions of the market.
7. Confirm the purchase
After reviewing the order, confirm the transaction and follow the instructions provided by Ziidi Trader to authorize the purchase.
Once your order is successfully matched and executed, the shares will be reflected in your investment portfolio.
Your order may not be executed immediately
One important thing new investors need to understand is that placing an order does not necessarily mean that you have immediately bought the shares.
The NSE operates as a marketplace where buyers and sellers are matched.
For example, if you specify that you are willing to buy a particular share at KSh 18 but sellers are only offering it at KSh 20, your order may remain pending until a suitable seller becomes available at your specified price.
This is why investors should understand the difference between placing an order and having that order executed.
What happens after buying shares?
After your purchase is completed, you can monitor your investment through the platform.
The value of your shares can change as the market price moves.
For example, if you purchase 100 shares at KSh 20, your initial share value is KSh 2,000. If the market price later rises to KSh 25, the shares would have a market value of KSh 2,500, before considering transaction costs.
However, if the price falls to KSh 15, their market value would fall to KSh 1,500.
This illustrates an important principle of investing in shares: returns are not guaranteed.
You can also earn dividends
Investors can potentially earn money from shares in two main ways.
The first is through capital appreciation, where the market value of the shares increases.
The second is through dividends, which are payments that companies may distribute to shareholders from their profits.
However, companies are not required to pay dividends every year, and the amount can vary depending on the company’s financial performance and dividend policy.
Things to consider before buying shares
Before investing through Ziidi Trader, consider the financial health of the company, its historical performance, dividend record, business model, industry and future prospects.
You should also consider your investment objective and how long you intend to keep the investment.
Most importantly, do not invest money you may need urgently for rent, food, school fees, emergency expenses or other essential obligations.
Start with an amount you can afford
You do not have to invest a large amount of money to begin learning about the stock market.
Starting with an amount you can afford to leave invested can help you understand how the market works without exposing your finances to unnecessary pressure.
Understand the risks
Shares can increase or decrease in value.
A company can also experience financial difficulties, changes in its industry, declining profits or other challenges that affect its share price.
Therefore, buying shares should not be viewed as a guaranteed way of making money.
Final thoughts
Ziidi Trader has made access to NSE-listed shares more convenient for Kenyan investors by bringing share trading closer to the mobile-money ecosystem.
However, convenience should not replace research.
Before pressing the Buy button, understand what company you are investing in, how much you are paying, the risks involved and how the investment fits into your broader financial goals.
The stock market can provide opportunities for long-term wealth creation, but successful investing requires patience, research and an understanding that prices can move both up and down.
