How To Start Investing By Buying Shares in Kenya.

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How To Start Investing By Buying Shares in Kenya.

Shares are a part or portion of a larger amount which is divided among a number of people, or to which a number of people contribute. In simple terms, a share may be a percentage of ownership during a company or a financial asset. Investors who hold shares of any company are referred to as shareholders.

There are two primary ways to earn money from shares - through capital appreciation and from dividends. By investing in shares, one can expect to earn through capital appreciation, i.e., on the gains made on the capital (principal invested) when the share price rises.

There are a number of companies, here in Kenya that one can start buying there shares and start earning. These are, Limuru tea, Jubilee holdings, Centum investment, Kakuzi, ARM cement, Crown paints, Equity Bank and KCB Bank.

TYPES OF SHARES

1. PREFERENCE SHARES

As the name suggests, this sort of share gives certain preferential rights as compared to other sorts of share.

The main benefits that preference shareholders have are: They get first preference when it involves the payout of dividend, i. e. a share of the profit earned by the corporate

When the corporate finishes up , preference shareholders have the primary right in terms of getting repaid.

2. EQUITY SHARES

Equity shares are also known as ordinary shares. The majority of shares issued by the corporate are equity shares. This type of share is traded actively within the secondary or stock exchange . These shareholders have voting rights within the company meetings. They are also entitled to urge dividends declared by the board of directors. However, the dividend on these shares isn't fixed and it's going to vary year to year counting on the company’s profit. Equity shareholders receive dividends after preference shareholders.

3. DIFFERENTIAL VOTING RIGHT (DVR) SHARES

The DVR shareholders have less voting rights compared to equity shareholders. To dilute the voting privileges, companies provide dividend to DVR shareholders. As DVR shares have less voting rights, their prices also are low. The price gap between equity shares and DVR shares is nearly 30-40%.

Benefits of shares include the chance for capital growth, dividend income, flexibility and control. The price of anything which will be bought or sold is unpredictable to some extent.
 

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