Towards Effective Communication of the Nairobi Stock Exchange: A Descriptive Survey of the Retail Investor

Abstract

The purpose of this study was to survey the retail investor of the Nairobi Stock Exchange (NSE) with a view to describing, analyzing and understanding their identity (demographic), awareness and knowledge, media use and preferences, investment related information needs, and their opinions about, and attitudes towards the Nairobi Stock Exchange. Five hundred (500) respondents were randomly selected from two purposively chosen companies listed on the NSE. A self-administered questionnaire was used to collect data, and the responses were coded. All scores were keyed in the com- puter using SPSS (6.1 release) and analyzed in terms of percentages and frequen- cies. Cross tabulations were done between audiences' investment profile and their demographics; audiences' investment profile and their demographics; audiences' media use and preferences and their information needs; audiences' knowledge and awareness and their investment profile current and future. The findings were that retail investors at the NSE are predominantly male, middle- aged, "O" level education and low-income earners. An average investor owns 2000 shares or less, in one to three companies listed on the NSE. Retail investors were found to lack basic knowledge and had a narrow view of the market. News- papers are their greatest source of information, however such information is not usually educative. They prefer to use English language. The NSE is alien to them, many have never had direct contact with it. Recommendations were made that it is the responsibility of the NSE to educate and safeguard their investments, that retail investors be segmented into small, medium and large, to localise communication strategies and programs to match the profile of the retail investor segments, and to re-position itself for greater par- ticipation and economic performance, by targeting a unisex, younger, educated and higher income audience segment.