Assessing Political Factors That Influence Local Participation in Nse and Its Implications on Trade in Kenya (2011 to 2017

Abstract

This study endeavours to assess the political factors which influence local participation in the NSE. These political factors are considered from the perspective of the government‟s and its agencies‟ policy interventions which serve to encourage individual Kenyans in taking part in the activities of the NSE. Most studies of trade in the NSE take a profoundly Economics discipline approach, which tend to be influenced by a Neo-Liberal market outlook that considers the market as self regulating. Consequently, local participants have been overlooked as an important segment in the trade of NSE largely due to being treated as a part of general traders of the NSE. Considering that local participants form more than 90% of registered traders in the NSE, yet they contribute less than 20% of the trading activities in the NSE. This study sought to find out ways in which the imbalance of registered local participants to the actual trades in the NSE attributed to this group can be evened. For instance, the NYSE and the US government assisted in raising household participation in trading activities from 3% to 25%. In this regard, the study makes a case of the NSE in taking a similar approach. Consequently, the study sought to find out the experience of local participants in the NSE, the incentives and disincentives to their taking part in the activities of the NSE and the most effective government interventions which encouraged local participants to trade in the NSE. Utilising the method of expert assessment (experts being the principal advisors of local participants who trade in the NSE) it was found that most local participants are pessimistic towards the NSE and that respondents were of the view that the government and its agencies are not doing enough to encourage local participants‟ trade in the NSE. As a result of local participants‟ response to government intervention in promoting trade in the NSE, the study found which interventions were the most effective from respondents. Consequently, the study uses its findings to recommend to the government and its related agencies on the specific interventions that can be utilised in order to bolster local participation in the NSE. A difference from previous studies is that local participants are better understood and therefore specific policy interventions to support this segment are recommended