SBG Securities, the country’s second largest brokerage house by market share, sees its innovation which allows investors to trade shares via USSD (Unstructured Supplementary Service Data)-enabled phones on Nairobi bourse as a game-changer.
The firm’s M-Shares platform enables retail investors to order, monitor in real time market information and sell their shares by sending a text to a special USSD code.
SBG Securities executive director Bethuel Karanja said he expects half of the company’s active retail investors not to queue at branches of stockbrokers to trade in shares in two years. Presently, about 33 per cent of SBG’s active clients transact via iTrader — an online trading platform it first launched in November 2010, but which has since undergone several upgrades.
Although several brokerage houses have web-based platforms which allow retail traders to buy, sell and monitor share deals, SBG’s innovation for trade via feature phones is one of the first in the country.
For example, SBG’s rival Dyer & Blair runs an android mobile app for retail stock trading called Edge, which enables retail investors to trade via smartphones. Increased efficiency and convenience of digital transactions, Mr Karanja said, is also expected to cut the firm’s operating costs. SBG’s expenses fell by 17.2 per cent in the first half of the year to Sh127.4 million.
The benefits of reduced costs will, however, not be passed onto clients immediately. “Cost reduction is not an event, it’s a process,” Mr Karanja said. Self-listed Nairobi Securities Exchange Plc’s director for derivatives Terrence Adembesa said mobile trading, which is still at the formative stage, has great potential for driving volumes by retail investors.
Retailers held 12.4 per cent of equities on average in the first half of the year, data from Capital Markets Authority shows.