CDSC has registered impressive milestones since 2004, as part of its larger mission to enhance efficiency in the capital markets. When CDSC commenced operations, the stock market in Kenya had subdued trading volumes and low levels of investor participation. This was due to the inefficient and largely manual trading system. This landscape has however since changed. Automation has contributed towards increased market activity both in the equity and bond markets. The attainment of an entirely paperless securities market, through immobilization and later dematerialization was a game changer for the market. The market turnover has increased exponentially from a low of Kshs. 15.3b (US$ 150m) in 2003 to a high of Kshs. 209.4b (US$ 2.05b) in 2015. Market capitalization grew from Kshs. 259 b (US$253.9m) in 2003 to a high of Kshs. 2.7 trillion (US$26.4 b) in early 2015. The number of shares traded per day has also grown from 46,553,983,707 shares traded between 2005 and 2012 to 1,146,903,040,463.15 shares traded between 2013 and 2015.
The number of deals per year have increased from 93,300 deals in 2005 to a total of 406,632 deals in 2015 with market capitalization increasing from Khs.259 b (US$2.5m) in 2003 to Kshs. 2.7 trillion (US$26.4b) in 2015. The conclusion of the Dematerialization process in 2013 and 2014 for equities and corporate bonds respectively has enhanced CDSC’s capacity to provide more efficient services at a cheaper cost as well as protect assets under its custody. It has also realized a positive impact on market liquidity, paving the way for the introduction of products such as short selling and securities lending and borrowing in the near future.
The steady improvement of the settlement cycle from T+5 cycle to T+4 and later T+3 in July 2011 which is a big development to the financial market infrastructure has tremendously increased trading activity, market liquidity and investor confidence, bringing Nairobi closer to her aim of becoming an International Financial Centre that will attract global financial services institutions.