Types of Shares in Kenya. And Which One You’re Probably Buying Without Knowing
Types of Shares in Kenya. And Which One You’re Probably Buying Without Knowing
Written by Postine Ngeli
Investing in shares is one of the most effective ways to grow wealth in Kenya. However, many investors buy shares without understanding their type. Knowing the type of share affects dividends, voting rights, risk exposure, and long-term returns.
This guide explains the main types of shares, what they mean, and which ones you might be buying unknowingly.
1. Common Shares (Ordinary Shares)
What they are: Part-ownership in a company with voting rights.
- Pros: Potential high returns, voting power
- Cons: Dividends not guaranteed, higher risk
Example: Safaricom ordinary shares traded on the NSE.
📌 Learn more: Shares Are Long Term — But How Long Is Long Term?
2. Preferred Shares
What they are: Shares with fixed dividends and priority payouts, often without voting rights.
- Pros: Stable income, lower risk than common shares
- Cons: Limited capital growth, usually no voting rights
📌 Related: Why Most Kenyans Lose Money in Shares
3. Convertible, Redeemable & Other Share Types
| Type | Feature | Why It Matters |
|---|---|---|
| Convertible | Can convert to common shares | Flexibility to benefit from growth |
| Redeemable | Company can buy back | Useful for short-term financing |
| Non-Redeemable | Permanent capital | Long-term ownership |
| Bonus | Free additional shares | Reward from profits |
| Rights | Discounted offer to existing shareholders | Raises capital with existing investors |
How to Choose the Right Shares
- Goal: Income vs growth
- Time horizon: Short (<3 years) vs long (5+ years)
- Risk tolerance: Conservative vs aggressive
👉 Step-by-step guide: How to Buy Shares in Kenya (2025 Guide)
Shares vs Other Investments
- Money Market Funds: Low risk, stable returns
- SACCOs: Limited growth, safer
- Shares: High potential returns but volatile
📌 Compare more: Shares vs Money Market Funds in Kenya
Common Mistakes Investors Make
- Buying shares without knowing the type
- Ignoring company fundamentals
- Trading based on tips, not research
- Failing to diversify across share types
Conclusion & Call-to-Action
Understanding share types lets you invest smarter and build long-term wealth.
👉 Ready to invest wisely? Start with our guide: How to Buy Shares in Kenya (2025 Guide)
💬 Comment below with your experience or questions — let’s help each other grow.
FAQ – Frequently Asked Questions
Q1: What are the main types of shares in Kenya?
A: Common (ordinary), preferred, redeemable, non-redeemable, convertible, bonus, and rights shares.
Q2: Which type of share do most Kenyans buy without knowing?
A: Common shares are the default and most widely purchased.
Q3: What is the difference between common and preferred shares?
A: Common shares offer voting rights and variable dividends; preferred shares pay fixed dividends and have priority but usually no voting rights.
Q4: Are shares long-term investments?
A: Yes. Ideally held for 5+ years to benefit from dividends and growth.
Q5: Can I invest in shares with a small amount?
A: Yes. Many brokers allow low-lot purchases or fractional shares.
About the Author
Postine Ngeli – Kenyan personal finance and stock market blogger at MoneyMarketHubKenya.blogspot.com. he helps investors understand financial markets, NSE shares, and smart investing strategies in Kenya.
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