From the comfort of his office, Mr George Njoroge, a stocks agent, follows

Written by Emmanuel Were *December 24, 2008: * http://www.bdafrica.com/index.php?option=com_content&task=view&id=5053&Itemid=5844 the "live" proceedings of trading at the Nairobi Stock Exchange (NSE), thanks to the data vending services introduced early this year. "I can follow the proceedings of the trading from my office," says Mr Njoroge. Sometimes when the Internet is slow he is forced to visit the NSE auditorium, where the public are updated by the minute via a projector screen. His experience sums up the development of data vending where some gains have been made albeit with several challenges as the service took shape this year. Before its introduction, the public had to wait until the close of trade to obtain the price list. All these developments have been brought about by the resurgence in the stock market evidenced by a series of Initial Public Offers (IPOs). The landmark listing of Safaricom, East Africa's most profitable company, is expected to shift stock market activity into top gear next year. Six data vendors were licensed by the NSE as trading metamorphosed from the open outcry system to the Automated Trading System (ATS). The introduction of the Wide Area Network (WAN) sets it a step away from full integration of online trading. Shareholders in towns such as Embu, Meru, Nakuru, Eldoret and Kisumu can follow live, the trading from the Nairobi Stock Exchange, the epicentre of the stock market. Stockbrokers who opened branches in these towns benefit as well. Not to be left behind also are Kenyans in the diaspora. "The excitement at the beginning was excellent and we managed to get good numbers of subscribers who have sustained our business up to date," says Mr Bildad Kagai, Managing Director, MediaCorp Limited one of the licensed data vendors. Data vendors have to invest a one- off sum of Sh170, 000 (US$ 2,700 at the current exchange rate) payable to the NSE, for a licence. Other costs include an Internet connection costing about Sh50,000 a month while running costs are estimated at about Sh350, 000 bringing total monthly costs to about Sh400, 000. "We have spent a lot of money in the last nine months but with poor returns," said Mr Kagai in an interview, putting the estimated costs in that period at Sh4 million. The cost element was one of the challenges that beset the data vendors in what initially appeared as a quick return avenue. Aly Satchu of Rich Management, another data vendor says: "My greatest challenge as that of drowning out the propaganda and elevating the debate and finally creating a platform for us all to make consistently superior returns." He adds that there is a need to educate the public about investing. In October, this year, there was uproar from some of the retail investors who read mischief as the NSE auditorium was closed for a day in what the exchange authorities attributed to ongoing renovations, only for them to succumb to pressure to reopen it the following day. Many retail investors want live streaming of data and information, few neither understand it nor put it to use. The live data has three main boards: Normal, Prompt and Odd boards. An Investor can tell the number of shares of the listed companies being sold and what is available for sale. Retail investors form the largest base of subscribers to the live data with an annual subscription of Sh6, 000. In an earlier interview, Mr Robert Maoga, CEO of Eight Limited, said there was limited appreciation of data vending services because many investors are still speculative in nature and are yet to grasp the fundamentals. "We've received a better response from the corporates so we're gearing our products toward that market segment," Mr Maoga said. "Responsibility has been left to us to build an acceptable product for the customer," he says. To break the cost barrier, the data vendors have had to be innovative in their approach and maximise and capture a large part of the crowd. "Users of our services have different levels of sophistication and varying investment objectives. Diverse products will add more value to our customers," said Mr Symon Ndirangu , chief executive Information Convergence Technologies, a data vending service provider in an earlier interview. While contending that many people were not aware of data vending services , Mr Ndirangu told the Business Daily that the responses his firm had received from current users had led them to structure new products that suit varying investor objectives and needs. Data vendors, in a bid to lure the retail market have broken down the charges with daily, monthly and yearly subscription. For a low as Sh100, one can have access to some of the data vending sites. The start of the NSE's Wide Area Network comes with a promise of increased online trading as the transactions will now be online. The extension of the trading hours for three extra hours, as trading commences at 09:00 and closes at 15:00hrs during weekdays is likely to bring increased participation. Work on the submarine cables which will enable cheaper and faster Internet connectivity is set to step into top gear next year and come to a conclusion in 2009 hence broadening the clientele base for the vendors as more people get online. Digital villages which are to be set up, by the Ministry of Information and Communication in 2008 will provide an opportunity for the data vendors to provide service. "We expect to make a good profit in the next 12 months now that Kenyans have realised the value of data and information when investing in the Nairobi Stock Exchange," says Mr Kagai. But he adds that this will only be possible if the number of vendors remains at 6 data vendors servicing clients from 18 brokers. "The numbers look workable" says Mr Kagai. -- -- Bildad Kagai MD - MediaCorp Limited Nairobi Stock Exchange [NSE] - Authorised Information Vendor Suite B2 Tetu Apartments StateHouse Avenue P. O. Box 20311-00200 Tel. 254 20 272 8332 Fax. Rendered Obsolete URL. www.mediacorpafrica.com --