1. The youths can build their wealth through capital and money markets.
NSE CHALLENGE
The youths can build their wealth through capital and money markets.

2. By UoN School of Business Team

3. Capital Market
It is the market for securities, where companies and the government can raise long-term funds.
Comprises of the stock market and the bond market.
It is operated by the NSE and regulated by The CMA

4. Capital Market Categories
Primary market; Deals with the issuance of new securities such as the Initial Public Offering(IPO) and issuance of bonds by the issuer to investors.
Secondary market; Is the financial market for trading of securities that have already been issued in an initial private or public offering

5. Money Market
Money market is the market where financial instruments with high liquidity and very short maturities are traded.
These instruments include; Treasury Bills and Notes, commercial paper, bankers acceptance, negotiable certificate of deposits and repurchase agreements.

6. Factors for investment decisions
Past market trends; You need to understand how various asset classes have performed in the past before planning your finances.
Your risk appetite; Understanding your capacity to take on risk is a crucial factor in investment decision making.
Investment horizon; How long can you keep the money invested? The longer the time-horizon, the greater are the returns that you should expect.

7. Factors for investment decisions
Investible surplus; This plays a vital role in selecting from various asset classes as the minimum investment amounts differ and so do the risks and returns.
Investment need; This helps you determine the amount of money you need to invest every month or year to reach the magic figure.
Expected returns; The expected rate of returns is a crucial factor as it will guide your choice of investment. Based on your expectations, you can decide whether you want to invest heavily into equities or debt or balance your portfolio

8. Investment options for the youths in the Financial Markets
Equities: Represent ownership of a company eg Safaricom shares. Equities give returns in form of dividends and price appreciation in the stock market.
Bonds: Are long-term fixed income securities issued by governments and corporations to raise funds. Bonds give returns in form of interest earned and principal payment when held to maturity. Youths will now find it easy to invest in bonds under the planned M-Akiba mobile trading bonds.

9. The current Kenya Government Bonds

10. Investment options for the youths in the Financial Markets
Mutual funds: A mutual fund allows a group of people to pool their money together and have it professionally managed, in keeping with a predetermined investment objective eg Old Mutual.
Unit trust: is unincorporated mutual fund structure that allows funds to hold assets and provide profits that go straight to individual unit owners instead of reinvesting them back into the fund eg on Unaitas and Madison.

11. Investment options for the youths in the Financial Markets
Real Estate Investment Trust(REITs): is a type of security that invests in real estate through property or mortgages and often trades on major exchanges like a stock eg Stanlib Fahari.
Cash equivalents: These are relatively safe and highly liquid investment options eg Treasury bills and Notes.

12. Investment options for the youths in the Financial Markets
Special interest collective investment schemes(chamas)
Investment trusts who apply for Private placement offers.
Collective investment schemes

13. Benefits of Collective Investment Schemes
Continuous professional management of the investments.
Low costs of investments due large amounts of funds that the fund manager manages; very low costs accrue per investor.
Diversification: Broader range of securities than would be when investing alone.
Convenient record keeping and administration by the fund manager.

14. Benefits of Collective Investment Schemes
Various types of schemes such as regular income plan, growth plan, equity funds, debt funds and balanced funds.
Liquidity: There is ease of buying and selling the units compared with investing directly in shares.
Fund managers invest in various industries and sectors that give good returns.
Access to broader array of financial assets.
Tax benefits: The CIS incomes are tax exempt.

15. Income Tax Benefits of Share Investments
Dividend tax free.
No long term capital gains.
Set off capital gains.
Carry forward capital loss.
Tax benefit of equity linked savings scheme.
Tax free treasury bonds and bills.

16. Survey on youth preference investment vehicles
Research Questions (11 Respondents)
Do you invest in the Capital or Money Market?
Do you participate in sports betting?
Between the two where do you think you can build wealth over time?

17. Findings
None of the respondent currently invest in Money or Capital Market.
8 of the respondent do bet, while 3 of them do not bet.

18. Conclusions Complexity of the market. Lack of interest.
Believe it’s for the wealthy people.
Lack of advertisements.
Less returns.

19. Reasons for Betting as opposed to trading in the Markets
36.4 % believe it is a source of quick money
18.2 % has high returns
18.2 % engage in betting for fun
18.2 % believe it is easier to participate
9.0 % believe it’s due to low initial capital

20. Challenges for the youth investors
Lack of investment mentors.
Investment and brokerage firms don’t reach out to the youths.
CDS Account opening requirements.
Complex registration procedures.
Ignorance and perceptions about the stock market.

21. Challenges for the youth investors
Capital requirements.
Inadequate market information.
Transaction costs and tax.
Betting short cut.
Ponzi schemes.
Technological constraints.

22. Recommendations
Come up with investment platforms for direct investments like a betting websites.
Come up with a InvestTec software such as Easy Equities in South Africa that has made low income earners to invest as little an equivalent of Ksh 70.
Create investment awareness in campuses to push the youths to focus on securities.

23. Thank you