NSE slashes day-trading fee for investors
The Nairobi Securities Exchange (NSE) has temporarily suspended part of the fees involved in day trading.
The waiver is expected to touch on ‘second leg’ fees charged on investors for selling or buying stocks after an initial purchase or selling transaction.
The move by the bourse is expected to better the traction of day trading at the NSE following the launch of the market mechanism in November last year.
“For a period of one month with effect from today, we will not be charging on that second leg. We are giving a one-month waiver on fees to increase activation,” NSE CEO Geoffrey Odundo said on Wednesday.
The NSE charges a levy of 0.12 percent on the first half of a day-trading transaction and a further levy of 0.114 percent on the closing half of the trade.
Day trading describes the buying and selling or buying shares of the same security on the same account on the same day.
At the same time, the NSE is pushing for the increased uptake of derivative contracts particularly from institutional investors as it holds out for increased interest in derivatives trading in anticipation of a turnaround in market performance.
“We all know markets will recover and hope investors can take up contracts that track upwards with the market,” added Mr. Odundo.
Turnover in the derivatives market fell by 36 percent to Ksh.27 million from Ksh.43 million between April and June.
This is as the number of derivatives contracts traded fell by 21 percent from 1188 to 934 in the quarter.
The NSE is betting on the recovery of the market in the fourth quarter off the year from the end of cyclical-investor sentiment downers such as the August 9 General Elections.
The market currently lies in the bear territory after heavy sell-off in the opening half of the year driven partly by external shocks which have seen foreign investors reallocate capital to safe-haven assets in home countries.
The past few days have seen a rally for the NSE signalling the likelihood of the market having found the trough marking the end of a months-long bear run.