March 6, 2022

The ideal way of making profits at the stock exchange is to buy at the bottom of the market (lowest M.P.S) and sell at the top of the market (highest M.P.S). The greatest problem however is that no one can be sure when the market is at its bottom or at its top (prices are […]

Stock Exchange Index is a measure of relative changes in prices of stocks from one period to another index. Nairobi Stock Exchange 20 – share Index (20 companies) (Daily basis) Stanchart Index – From 25 most active companies in a given period (weekly basis) Computation of price index. Uses of Stock Exchange Index 1. To

The activities in NSE are normally low due to several factors that may come into play. These include the following among others: 1. Few Listed companies 2. Economy is made up of small firms which are family owned or sole proprietorship. 3. Level of awareness among the population is low 4. Few instruments traded 5.

All sorts of influences affect share prices. These influences include: 1. The recent profit record of the company especially the recent dividend paid to shareholders and the prospects of their growth and stability. 2. The growth prospects of the industry in which the company operates. 3. The publication of a company’s financial results i.e. Balance

1. Economic conditions of the country and other non-economic factors e.g. unfavorable climatic conditions and diseases which may lead to low productivity and poor earnings. 2. State of management of the company e.g. are the B.O.D. and key management personnel of repute? They should be trusted and run the company honestly and successfully. 3. Nature

1. Income in form of dividends When you have shares of a company you become a part-owner of that company and therefore you will be entitled to get a share of the profit of the company which come in form of dividends. Furthermore, dividends attract a very low withholding tax of 5% only. 2. Profits

1. Raising Capital for Businesses The Stock Exchange provides companies with the facility to raise capital for expansion through selling shares to the investing public. 2. Mobilising Savings for Investment When people draw their savings and invest in shares, it leads to a more rational allocation of resources because funds which could have been consumed

The basic function of a stock exchange is the raising of funds for investment in long-term assets. While this basic function is extremely important and is the engine through which stock exchanges are driven, there are also other quite important functions. 1. The mobilization of savings for investment in productive enterprises as an alternative to

Stock exchange (also known as stock markets) are special “market places” where already held stocks and bonds are bought and sold. They are, in effect, a financial institution, which provides the facilities and regulations needed to carry out such transactions quickly, conveniently and lawfully. Stock exchange are developed along with, and are an essential part

These are institutions which mediate or link between the savers and investors. There are numerous financial intermediaries in Kenya and include the following. 1. Commercial Banks. They act as intermediary between savers and users (investment) of funds. 2. Savings and Credit Associations These are firms that take the funds of many savers and then give

1. Organised Exchange and Over the Counter (OTC) market This is where the buying and selling of securities is done but buyers and sellers are not present but only the agents (brokers) internet. This system is called “open outcry”. 2. Over the Counter Market (OTC) Provides an opportunity for unlisted/unquoted firms to sell their security.

These are markets that deal with securities that have been issued for the first time. The money flows directly from transferor (saver of money) to transferee (investing person). They facilitate capital formation. Economic Advantage of Primary Markets 1. Raising capital for business. 2. Mobilising savings 3. Government can raise capital through sale of Treasury bonds