The effect of online and mobile trading practices on the active momentum trading at Nairobi securities exchange.
The primary purposes of the study were to study the effect of online and mobile trading practices on the active momentum trading at Nairobi Securities Exchange. The target population was companies listed in Nairobi Securities Exchange and had do make up NSE 20 Share Index. The results of the study were both qualitative and quantitative. Quantitative data collected from NSE 2010 to 2012 historical trade price, NSE 20 share Index value and number of share traded each day was analyzed using multiple regression analysis and the correlation was determine as well as hypothesis testing to determine the validity of the equation obtained. The information was also represented by use of graphs, table, and pie charts and in prose-form. This was done by gathering and analyzing data, then using excel to computes and present the figures. The research found out that indeed internet and mobile device usage has indeed affected momentum trading in Nairobi Securities Exchange. Introduction of Broker Back Office System, (BBOS) in September 2011 which we can highlight as being an activity that did changed the NSE to an online trading practicing. Using momentum trading strategies which operate on shorting any stock that touches its six month low and longing stock that touches six month high internet has facilitated easier tracking of their price and also efficiency in executing the transaction regardless of the location. The study found that just as the in the banking sector where the influence was there but still low the same happens in the securities exchange. The study recommends further research on how internet is influencing and affecting different sector in Kenyan economy especially securities market. Also it did recommend necessary promotion steps to educate potential investor of the benefit of online and mobile trading. From the study there is a need to improve on cybercrime security to avoid investors losing fund. Also there is a need to lower related cost as online system is much cheaper and to improve the efficiency and ease of use from different broker agencies interfaces.