Two years ago, Charles Kanjoya a 28 year old Kenyan lost his job with Oakar Services, a Nairobi based company dealing with Geographical Information Systems. The Information Systems administrator spent five months of job seeking without success. Charles eventually opened Stock Spin Agencies Limited, which is one of the agencies of Solid Investment Securities (brokerage firm). Charles shares his one year experience at the firm with The African Executive.

Excerpts:

Q. Why did you hook yourself on Solid Investment Securities and not any other investment?

A. I had tried my hand on a beauty training school and bar but closed them since they were not doing well. I decided to try something different.

Q. Why were they not doing well?

A. Mismanagement. When I opened, them I was still a student at University of Nairobi. Balancing my studies with the business was quite a challenge. I did not have much time to market my businesses, interact with my employees and advise when necessary. I ended up making losses.

Q. What was your motivation behind opening Stock Spin Agencies Limited?

A. My past experience. While I was working at Oakar Services I broached my intention to invest in something totally new to a few of my friends. Some of them encouraged me to buy shares. One referred me to Dyer and Blair (a brokerage firm). The person I talked to at Dyer and blair advised me to buy Kenya Airways shares, which were going at Ksh.8. I was not keen on doing this until after I had given up on my job search. I then realized that one can make profit by investing in shares. That is when I decided to start talking to people and encouraging them to invest in shares.

Q. What challenges do you face?

A. Lack of capital is the major challenge. Consequently, most agents cannot afford to have their own offices. This forces them to operate from their brokers’ offices hence eroding investors’ trust. There are only 47 listed companies and this limits one’s choice of shares to buy. Most people do not know about shares, so convincing them that they can profit from capital gains and dividends is not easy. Past experiences have also affected customers. The closure of Uchumi Supermarket, for example sparked panic amongst investors. The effect was felt in the market, not forgetting that almost a third of the investors had come in when KenGen announced its IPO.

Q. Any advice on this?

A. People should know one has an option to invest in shares both for long and short term benefits. It is important that investors buy shares from companies that are promising. With Ksh.20,000 one can buy shares and you will be amazed at how much one can make with this amount by the end of one or two years.

Q. What determines the share price?

A. The forces of demand and supply

Q. How does an investor know whether a company is doing well?

A. People should focus on companies that enjoy monopoly. Consider where the company is heading. Look at the current status of the company: is it registering profit or losses? If it’s making losses, can you justify them?

Q. How many clients do you have so far?

A. Over 1,000

Q. How do you make your profit?

A. The broker pays me some commission and I charge my clients a small fee from their net profit because of logistical services such as making calls, office visits, financial advise and updates on upcoming IPOs, just to name a few.

Q. How much do you make per month?

A. Between Ksh. 50,000 to 100, 000.

Q. What are your future plans?

A. To diversify and encourage people to diversify in other upcoming African markets, increase my client base and open a brokerage firm.

Q. What is the future of the Nairobi Stock Exchange?

A. Very bright. Kenyan stock market is growing with more companies getting listed. There has been a major increase in the share prices in most of the blue chip companies, some registering over 10 times increase in the last one and a half year.

Q. Why the increase in the share prices?

A. If the performance of the company over the years has been good and the future prospects are promising, the demand for the share is high compared to the supply. Hence the rise in price.

Q. What led to the closure of Uchumi?

A. I think mismanagement was the key thing that brought it down. It was quite wrong for the management to conceal its poor performance to both the investors and suppliers. It led to huge losses to some customers. However, what I have observed is investor’s confidence in some local companies that are not doing well. Some investors are always willing to invest in them even after declaring a huge loss.

Q. What does its opening portend for the market?

A. There is hope for the Uchumi shares to start selling again in the market though it may take some time. It is relief to most investors who had invested in the business.