Why retail investors shy away from capital markets
Retail investors in Kenya have given the capital markets a wide berth as a result of high transaction fees, low market awareness and a myriad of regulatory red tape.
A survey conducted by the Institute of Certified Investment and Financial Analysts (ICIFA) titled “An Assessment of Challenges that Retail Investors Face in Kenya’s Financial Market”, released late last week also blames inadequate capital to invest among the key deterrents for Kenyans to invest in financial markets.
Out of the more than 15,000 respondents from the survey, more than 70 per cent proposed a raft of measures to restore confidence in the capital markets which include, the introduction of more products, permitting borrowing and lending of securities to retail investors, promotion of investor education, training and workshops that foster and promote ethics within financial services, and better enforcement by the industry regulators.
Others include advertising and marketing, increased transparency of all market players, availing the Nairobi Securities Exchange (NSE) market data for free, elimination of investment bureaucracy, enhancement of investor experience addressing grievances in a timely manner, lowering of brokerage fees, lowering the minimum trading amount and negotiation with the government to lower the taxes on trading.
Diana Muriuki, the ICIFA chief executive officer said the survey was conducted to provide insights into the paradigm shift that has been witnessed in the last She said with continued and active consumer education on products, services and procedures of the financial markets, retail investors will be better positioned to make sound investments.
