Nairobi Bourse Rolls Out Day Trading to Deepen Market

Local investors at the Nairobi Securities Exchange (NSE) will now participate in intraday trading. The bourse says this will deepen capital markets.

Nairobi Securities Exchange

Local investors at the Nairobi Securities Exchange (NSE)  will now participate in intraday trading. The bourse says this will deepen capital markets. 

Day trading is the practice of purchasing and selling a security within a single day or trading session or multiple times over the course of the day. 

Investors who participate in day trades will receive a discount on the second leg of the transaction which will be levied at 0.114 per cent compared to normal trades which are levied at 0.12 per cent.

“Day trading is a welcome move for local investors who have previously lobbied for the activation of the intraday trading, as they seek to take advantage of intraday price movements and increase their profit margins. We are confident of a bullish market performance going forward,” said Mr Geoffrey Odundo the Chief Executive, NSE.

“Looking forward, we expect to see increased turnovers and enhanced market liquidity following the rollout. Investor education remains key to the program’s success.

Day trading requires various strategies coupled with trading discipline to hedge from psychological biases that may arise,” Genghis Capital said in its Cross-Asset Weekly Strategy dated 1st November 2021. 

Day trading will also complement the derivatives market launched in 2019. Derivatives allow investors to make a gain or hedge against losses by taking a bet on the future price movement.

Week ending 19 November, the derivatives market recorded a slump in activity with 2 single stock features valued at Ksh 79,720 traded compared to the 3 single stock features valued at Ksh 129,420 traded during Thursday’s trading session.