Investing Glossary

The price tag the seller puts on their shares — the minimum they will accept.

Example: If Safaricom has an ask price of KES 28.50, that is the cheapest price you can buy it for right now.

When the stock market goes through a rough patch and prices keep dropping.

Example: The NSE experienced a bear market during the COVID-19 pandemic in early 2020.

How jumpy a stock is compared to the overall market. Beta > 1 means more jumpy, < 1 means calmer.

Example: A stock with beta 1.5 vs NASI moves 15% when NASI moves 10%.

The best offer from someone who wants to buy shares — the most they are willing to pay.

Example: If KCB has a bid of KES 32.00, that is the most anyone is currently offering to pay.

A big, trustworthy company that has been around a long time and consistently makes money.

Example: Safaricom, Equity Group, and KCB Group are considered NSE blue chips.

The middleman who actually buys and sells shares for you on the stock exchange.

Example: Faida Investment Bank and Genghis Capital are examples of NSE-licensed brokers.

When the stock market is doing well and prices keep climbing.

The money you make when you sell a stock for more than you paid for it.

Example: Buy EQTY at KES 40, sell at KES 55 = KES 15 capital gain per share.

Your digital wallet for shares on the NSE. All your shares are stored here.

Example: You need a CDS account through a licensed broker to buy shares on the NSE.

Kenya's stock market watchdog. They make sure brokers and companies play by the rules.

Example: All NSE brokers must be CMA-licensed. Check their website to verify.

Don't put all your eggs in one basket — spread your money across different stocks and sectors.

Example: Instead of putting all your money in Safaricom, invest across banking, telco, and manufacturing stocks.

Cash the company pays you just for owning their shares, usually from their profits.

Example: Safaricom paid a final dividend of KES 0.64 per share in 2024.

The percentage return you get from dividends alone. Higher yield = more cash for your investment.

Example: If a stock pays KES 2/year and the price is KES 40, the yield is 5%.

How much profit the company makes for each share. Higher EPS usually means a more profitable company.

Example: If Equity Group earned KES 38B with 3.78B shares, EPS = KES 10.05.

The deadline — you must own the stock BEFORE this date to get the dividend.

When a private company opens up and lets the public buy shares for the first time.

Example: Safaricom's IPO in 2008 was oversubscribed by 532%, showing massive demand from Kenyans.

Setting a maximum buy price or minimum sell price. The trade only happens if the price hits your target.

Example: Place a limit order to buy SCOM at KES 25.00 — it only executes if the price drops to 25 or below.

How easy it is to buy or sell a stock. Popular stocks are highly liquid; rarely traded ones are illiquid.

Example: Safaricom is the most liquid stock on the NSE — you can buy or sell easily any day.

How much the entire company is worth according to the stock market (share price times total shares).

Example: Safaricom's market cap is around KES 700B, making it the largest company on the NSE.

Buy or sell right now at whatever the current price is — fast but you don't control the exact price.

The main thermometer for the NSE. If NASI is up, the overall market is doing well.

Example: When NASI rises 2%, it means the total value of all NSE-listed companies increased by about 2%.

An older index that follows the 20 busiest stocks on the NSE.

Compares the stock price to what the company's assets are actually worth on paper. Below 1 may be a bargain.

How much you pay for KES 1 of the company's profits. Lower P/E might mean the stock is cheaper.

Example: If EQTY trades at KES 50 with EPS of KES 10, the P/E ratio is 5x.

All of your investments put together — your personal basket of stocks and other assets.

When a company gives existing shareholders a chance to buy more shares at a cheaper price.

Example: KCB has conducted rights issues to raise capital for regional expansion.

How well the company uses shareholder money to generate profits. Higher ROE = more efficient.

The handover — when the shares officially become yours and the seller gets the money.

Example: NSE uses T+3 settlement — shares and cash are exchanged 3 business days after the trade.

The total number of shares that exist for a company — owned by everyone combined.

Example: Safaricom has about 40 billion shares outstanding.

Like cutting a pizza into more slices — you have more pieces but the same amount of pizza (value).

How much money changed hands on the exchange. High turnover means lots of buying and selling.

Example: Daily NSE turnover is typically between KES 200M and KES 800M.

How much a stock's price swings up and down. High volatility = wild ride; low volatility = smooth sailing.

How many shares changed hands. High volume means lots of people are buying and selling.

Example: Safaricom typically has the highest daily volume on the NSE.

Your shortlist of stocks you are keeping an eye on — like a shopping wishlist for investments.

Example: Add stocks to your Stockr watchlist to track price movements before buying.

Tax taken out automatically before you receive your dividend — you do not have to do anything.

Example: Kenya applies 15% withholding tax on dividends for resident shareholders.

The percentage of return you get from your investment, usually from dividends.