While the soaring cost of living in 2023 is squeezing many people’s wallets, the Nairobi Securities Exchange is abuzz with NSE stocks minting money for investors. The Nairobi Securities Exchange (NSE) is where investors buy and sell shares in Kenya. The exchange hosts several dozen stocks representing a broad range of industries.
It can be challenging to identify the best companies to invest in Kenya. But if you take your time to analyse the market and put your money in the right companies, the rewards can be exciting. Before we dive into the NSE stocks making investors rich this year despite the rising cost of living, it helps to know how investors actually make money in the stock market.
There are two main ways people make money with stocks: dividends and capital gain. When a company makes a profit, it can decide to share a portion of it with its shareholders. The money that the company distributes to its shareholders from its profit is called the dividend. Since not all companies are profitable, not all NSE companies pay dividends. But even profitable companies may not pay dividends for various reasons.
Capital gain, on the other hand, occurs when the stocks you own appreciate in price. Let’s say you bought a stock at Ksh10 and its price jumps to Ksh15 after some time. In that case, your capital gain on that stock would be Ksh5 or 50%. Capital gain is the primary way investors make money in the stock market.
With that in mind, let’s explore the 6 NSE stocks making the most money for investors this year on the basis of the capital gain.
6. Carbacid Investments (CARB) – 31%
Carbacid is a supplier of carbon dioxide gas, which it primarily sells to food industry customers. When you open a bottle of soda or beer, the gas you see coming out is carbon dioxide. The gas is used to preserve the drinks. Carbacid is the leading supplier of food-grade carbon dioxide across the East African region.
Moreover, Carbacid supplies carbon dioxide used in fire extinguishers and welding operations.
Carbacid stock price has climbed more than 31% since the beginning of the year. It means that if you invested Ksh20,000 in Carbacid shares at the start of January, you would have Ksh26,200 now. Investors who put Ksh100,000 in the stock have seen their investment grow to Ksh131,000.
The gas company’s stock trades under the “CARB” ticker symbol on the NSE. Carbacid share price was at Ksh15.80 at the close of business on 26th September.
5. Eaagads Limited (EGAD) – 33%
Eaagads is in the coffee business. It grows coffee and sells coffee products to domestic and international customers. The company is estimated to produce nearly 300 tonnes of coffee annually.
Eaagads stock price has jumped 33% since the beginning of the year. It means that if you invested Ksh20,000 in the shares of the coffee company, your investment would be worth Ksh26,600 now. If you put Ksh100,000 in the coffee stock, you would have Ksh133,000.
On the NSE, Eaagads stock trades under the “EGAD” code. Eaagads share price was at Ksh13.45 at the close of business on September 26.
4. HF Group Limited (HFCK) – 40%
HF Group is a diversified financial services provider. It started off as a mortgage lender, but has diversified into other financial areas. While maintaining its roots in the housing market, HF Group also provides banking, asset financing, and insurance services.
HF Group stock has gained more than 40% year-to-date. It goes that if you invested Ksh20,000 in the financial provider at the beginning of the year, you would have Ksh28,000 now. Someone who invested Ksh100,000 in the stock has seen their money grow to Ksh140,000.
On the NSE, HF Group stock trades under the “HFCK” ticker symbol. HF Group share price was at Ksh4.70 at the close of business on September 26.
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3. Kapchorua Tea Company Limited (KAPC) – 73%
Kapchorua grows tea and sells tea products in Kenya and international markets. The company operates from the Rift Valley, where it has hundreds of hectares of farmland.
Kapchorua stock price has jumped 73% year-to-date. It means that Ksh20,000 invested in Kapchorua shares at the start of the year has grown to about Ksh34,6000. If you put Ksh100,000 put in the tea stock, you would have Ksh173,000.
Kapchorua stock trades on the NSE under the “KAPC” ticker symbol. Kapchorua shares price was at Ksh196 on September 26.
2. Umeme Limited (UMME) – 77%
Umeme is a Ugandan electricity distribution company. You can think of it as the Kenya Power of Uganda. The company supplies electricity to homes, businesses and factories.
Umeme stock price has climbed more than 77% year-to-date. As a result, you would have Ksh35,400 now if you invested Ksh20,000 in the stock at the beginning of the year. Someone who pumped Ksh100,000 into Umeme shares would have Ksh177,000 now.
The Ugandan electricity company’s stock is listed on the NSE under the “UMME” ticker symbol. Umeme share price was at Ksh13.45 on September 26.
1. Eveready East Africa (EVRD) – 98%
Eveready manufactures batteries that power spotlights, cameras, cars, and other devices and systems. For example, Eveready batteries are used in solar and wind power systems for backup energy storage.
The company also makes light bulbs under the Turbo brand. Eveready sells its products across East African countries.
Eveready shares have gained more than 98% since the start of 2023. It means that if you put Ksh20,000 in Eveready stock in January, your investment would now be worth Ksh39,600. An investor who put Ksh100,000 in Eveready stock would have Ksh198,000 now.
The battery company’s stock trades on the NSE under the “EVRD” ticker symbol. Eveready share price was at Ksh1.35 on September 26.
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How to buy Eveready shares
Eveready stands out as the best-performing NSE stock year-to-date. While there is no guarantee that Eveready share price will keep rising, it may go up more if market forces continue to favour it.
Beyond Eveready, there are many other promising NSE stocks you may also want to consider. Whether you choose to buy Eveready shares or other stocks, the process is the same.
The first thing you need to do is open a stock trading account called the CDS account. You can open the account through a stockbroker. Make sure to choose the right stockbroker, since broker fees and features can vary across the board.
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Select a stockbroker with low fees and online trading features. That would enable you to keep your investing expenses low and allow you to buy and sell shares on your laptop or smartphone.
Once you open the CDS account, the next step is funding it. That means depositing money to buy the shares you want. Most stockbrokers accept bank and M-Pesa deposits.
How much you should deposit depends on the price and number of shares you want to purchase. Bear in mind that the minimum number of shares you can buy on the NSE is 100 shares.
Benard Adera is a freelance writer covering financial topics.
How do i open a CDS account?