Safaricom, the Nairobi Securities Exchange (NSE) and Kestrel Capital launched Ziidi Trader on Tuesday, an innovation leveraging the M-Pesa ecosystem to ease buying and selling shares targeted at retail/individual investors.
What is Ziidi Trader?
This is a service available via the M-Pesa application, which allows investors to buy and sell NSE-listed stocks through the mobile money platform.
How do I sign up to buy and sell shares via M-Pesa?
An individual will be required to opt into the Ziidi Trader platform which is accessed through M-Pesa as a mini application under the financial services tab.
The M-Pesa PIN is required to activate the Ziidi Trader after, which Safaricom sends investors a one-time password (OTP) unlocking access to the trading platform.
The sign-up does not require any paperwork, or documents upload as it relies on the existing M-Pesa know your customer (KYC) credentials to process signups.
What can an investor access through Ziidi Trader?
An investor logged in to the Ziidi Trader platform will be able to have an overview of the market by seeing all traded companies on the NSE complete with other elements including the prevailing stock prices, companies’ logos and a short description about the company and its recent performance.
Under the trade tab, an investor can pick an equity/company of their choice and opt to either buy or sell it. The tab offers a view on activity in each counter including available share volumes, bid and ask prices.
A portfolio tab shows an investor's total share purchased, the value of the shares held and the profit or loss position over the investment’s horizon.
Is Ziidi Trader available via USSD?
No. Safaricom has opted to leave out the Ziidi Trader from the unstructured supplementary service data (USSD) given the volume of data points and inputs required which would lengthen the trading process in the ecosystem, defeating the purpose of the innovation.
The telecoms operator is betting on the high penetration of 4G devices/smartphones which beat the number of feature phones to support the onboarding of most retail/individual investors.
Yes. While Ziidi Trader does not require an investor to open a Central Depository System (CDS) account, shares purchased and held in an omnibus trading account by the broker are still accompanied by a ledger which identifies the individual owners of the stocks.
With the proof of ownership, the broker can distribute any dividends paid on stocks held to the respective investors and assign voting rights to the shareholders.
What’s the difference between investing via a CDS account and opting for Ziidi Trader?
The difference between the two is that the Ziidi Trader shortens the time taken to access the equities market by cutting back on time previously used up in opening a CDS account.
Sign ups to the Ziidi Trader take minutes while opening a CDS account can last anywhere from days to weeks depending on the state of each broker’s system and/or capabilities.
Opening a CDS account requires an investor to fill key KYC details including next of kin, bank account and upload documents including the KRA PIN and identification card.
Ziidi Trader does not require a CDS account as investor shares are held in a single omnibus/CDS account owned by the brokerage.
Do I need to move funds from M-Pesa to Ziidi Trader to buy shares?
No, Ziidi Trader seamlessly connects to the entire mobile money ecosystem allowing investors to pay for shares purchased directly from their M-Pesa wallet through prompting while proceeds from the sale of shares are credited to the M-Pesa wallet.
In future, the Ziiidi Trader will allow investors to pay for purchased shares through the Ziidi Money Market Fund (MMF) which also sits within the same M-Pesa ecosystem.
Do I determine the purchase or sale prices for shares?
Yes. Each investor has a view on market activity including trading volumes, respective bid and offer prices. An investor can determine their bid price when buying shares or set an asking price while selling shares.
The platform also helps investors through this process by allowing one to auto select the best possible bid or ask price based on the prevailing offers in the market.
Can I lose money on Ziidi Trader?
Yes. Ziidi Trader allows investors to purchase equities which traditionally are moderate to high-risk assets where swings in prices in either direction can imply a profit or loss for an investor.
Under a bull run, an investor will post a profit as the price of purchased shares rises. In the vice-versa, a market downturn will result in falling prices and subsequently a loss.
Can I get investment advice on Ziidi Trader?
At present, the Ziidi Trader does not embed any investment advisory meaning each investor must undertake their research on the best action to take in the equities market.
In future, Safaricom hopes to embed investment advisory to the trading platform, giving investors access to key research and information to help make investing decisions.
