How to sell investments in Kenya from the UK (NSE trading)

Considering investing in the Nairobi Securities Exchange (NSE)? If you’re looking to buy and sell shares in Kenya from the UK, there are a few important things you need to know.

In this guide, we’ll walk you through the process of buying, selling and investing in Kenya stocks from the UK. This includes how to open a trading account, what forms you need to fill in, and how you can calculate the cost.

We’ll also show you how to minimise fees or avoid them altogether, using a multi-currency solution such as Wise.

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When investing, your capital is at risk. The value of your investments can go down as well as up and you may get back less than you put in. Tax treatment depends on your individual circumstances and may be subject to future change. The content of this article is provided for informational purposes only and is not intended to be, nor does it constitute, any form of personal advice.

Investments in a currency other than GBP are exposed to currency exchange risk. Currency exchange rates are constantly changing, which may affect the value of the investment in GBP terms. You could lose money in GBP even if the stock price rises in the currency of origin. Stocks listed on overseas exchanges may be subject to additional dealing and exchange rate charges, and may have other tax implications, and may not provide the same, or any, regulatory protection as in the UK.

How to invest in Kenya stocks from the UK

It can be extremely difficult to buy shares in Kenya if you’re based outside the country.

The majority of UK online trading platforms - including eToro, Trading 212 and IG - don’t offer direct trading of stocks on the Nairobi Securities Exchange (NSE).

This is because Kenya is known as a ‘frontier market’, a developing market where there is a liquidity and execution risk. For major UK retail platforms, it isn’t worth offering direct access - as the demand is far greater for other global stock markets such as in Europe, the US, China, Singapore, Japan and Hong Kong.

However, it’s not impossible to trade in Kenyan stocks and shares. You have three realistic options as a UK investor:

1. Use a global broker
2. Use a Kenyan broker
3. Invest indirectly via Africa-focused funds.

We’ll look at each of these options in more detail below.

Option 1: Buying shares in a Kenyan company through a Kenyan broker

If you actually want to own shares directly, in your name, then using a Kenyan broker is the clearest route to go for.

However, it’s challenging if you’re living in the UK. This is because you’ll often need a Kenyan passport or ID card, and a KRA PIN (tax number), to sign up with a licensed broker and open a Central Depository System (CDS) account. This account is essential for buying and selling Kenyan stocks.

Some Kenyan brokers do work with international clients, although their services may be limited to high-net-worth individuals. This may mean meeting a minimum income, savings or investment threshold to qualify.

Options to look into include Dyer & Blair Investment Bank, Genghis Capital and Faida Investment Bank. One or more of these brokers may accept a foreign passport and overseas account opening, but you’ll need to get in touch to check.

If you’re successful, here’s a brief step-by-step guide to buying shares in Kenya with a local stockbroker:

1. Open a Central Depository System (CDS) account
2. Open a trading account with a licensed Kenyan broker (your broker may also help you to open a CDS account)
3. Fund the account - usually in USD or GBP, converted to Kenyan shillings (KES)
4. Place trades directly on the Nairobi Securities Exchange - your broker may even offer an online trading platform to facilitate the process.

Option 2: Buying shares in a Kenyan company through a global broker

The second option is to find an international broker which can help you open a CDS account and buy shares from the UK. This can be tricky, as NSE stocks aren’t usually available.

One option to try is a global broker like Interactive Brokers which offers a wider range of stock markets. Alternatively, you’ll need to find a specialist broker.

📚 Interactive Brokers review

Option 3: Invest in an Africa-focused ETF

The final option if you’re keen to invest in Kenya is to buy an Africa-focused fund instead. This means you won’t necessarily own shares in a specific Kenyan company of your choosing, but instead you’ll be spreading investments across a basket of African companies - which may include some in Kenya.

Funds are generally very easy to buy, but be aware that not all UK trading platforms will offer Africa or Kenya-focused funds. Availability may also depend on UK retail regulations. You can try global platforms such as Interactive Brokers, or contact a specialist broker to help you track down a suitable fund.

For most UK investors, investing in an Exchange Traded Fund (ETF) is the most practical and realistic way to invest indirectly in Kenyan stocks.

How much does it cost to buy shares in Kenya?

Whether you buy/sell shares or invest in a fund, in most cases you’ll need to go through a broker - and this means paying fees.

The exact fees will vary between brokers and platforms, but here are the main ones to look out for:

• Account/platform fees
• Broker/commission fees
• Trading/dealing fees
• Withdrawal fees
• Fund management costs
• Foreign exchange fees.

📚 How to buy shares in the UK

Selling or trading shares in a Kenya company from the UK

Ready to sell your shares? You’ll need to follow the same route as when buying them, which will usually mean contacting your broker or using their online trading platform (if available).

Then, you’ll follow these steps:

1. Contact your broker or log into your broker account
2. Select the stock you own.
3. Enter the number of shares you’d like to sell, or the value of shares
4. Choose an order type (for example, market or limit order)
5. Submit the sell order.
6. Wait for trade execution (may depend on liquidity)
7. Wait for settlement - this usually occurs within a few business days
8. Receive the funds - these will be credited in KES to your brokerage account
9. Convert KES to GBP/USD and request a bank transfer if needed.

Before selling investments, it’s wise to get some financial/tax advice to understand any potential tax implications in the UK. You may be liable for income tax or Capital Gains Tax (CGT), which can eat into your returns.

📚 How to sell shares in the UK

Opening hours of international stock markets

As you take your first steps into international trading, it can be useful to know the opening times of major stock markets around the world - as well as the Nairobi Securities Exchange (NSE):

You might also want to take a look at our stock price reference and currency conversion tool.

Don’t let currency conversion trip you up when trading - use Wise

If you do manage to find a route to invest in Kenya stocks from the UK, there’s one last important thing to consider - the often significant extra costs which come from currency conversion.

You may already be paying broker fees, but there are likely to be extra fees and exchange rate mark-ups when converting GBP to Kenyan shillings (KES) or when you sell your shares and convert KES back to GBP.

That’s where a Wise account comes in, helping you to reduce or avoid these charges. Not just that, but you can:

• Convert money at the mid-market exchange rate, with low and transparent fees*
• Conveniently manage your money in currencies, sending payments worldwide
• Hold a selected number of major currencies until you’re ready to invest or withdraw
• Set up exchange rate alerts so you know when the KES/GBP rate moves in your favour.

There’s even a dedicated secure service for transferring large amounts. You can also take advantage of Wise Interest, turning it on in your account to help you earn a return on GBP, USD or EUR, and invest in a fund that holds government-backed assets.

Turn on Wise Interest

Investments can fluctuate, and your capital is at risk. Interest is offered by Wise Assets UK Ltd, a subsidiary of Wise Payments Ltd. Wise Assets UK Ltd is authorised and regulated by the Financial Conduct Authority with registration number 839689. When facilitating access to Wise investment products, Wise Payments Ltd acts as an Introducer Appointed Representative of Wise Assets UK Ltd. Please be aware that we do not offer investment advice, and you may be liable for taxes on any earnings. If you're uncertain, we urge you to seek professional advice. To find out more about the Funds, visit our website.

Sources used: N/A