Cheap vs Expensive Shares in Kenya: What Investors Should Know

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Cheap vs Expensive Shares in Kenya: What Investors Should Know Cheap vs Expensive Shares in Kenya: What Investors Should Know Introduction Many beginner investors in Kenya make one critical mistake when entering the stock market—they judge shares purely based on price. There is a widespread belief that cheap shares are good deals while expensive shares are risky or “too late” to invest in. This thinking often leads to poor investment decisions and missed opportunities in the Nairobi Securities Exchange (NSE). The reality is simple: the biggest mistake NSE beginners make is confusing share price with value. Understanding this difference is what separates smart investors from those who struggle to make consistent returns. What Are Shares? Shares represent ownership in a company. When you buy shares, you become a part-owner of that business. This means you can benefit in two main ways: Capital gains (when the share price increases) Dividends (profits s...
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US Government Blocks Kenya’s Plan to Tax Big American Companies

US Government Blocks Kenya’s Plan to Tax Big American Companies

TL;DR:
Kenya tried to make large American tech firms like Google and Meta (Facebook/Instagram) pay more tax on money earned from Kenyan users. The US government pushed back, making the plan harder to enforce. This affects government revenue, which touches borrowing, interest rates, SACCO dividends, MMF returns, and long-term investments.

Why This Matters to Everyday Kenyans and Investors

Many Kenyans ask:
“If big foreign companies make money from Kenya, why doesn’t Kenya tax them like ordinary businesses?”

This headline is about fairness and revenue — and it affects your savings, investments, and financial future.

What Kenya Was Trying to Do — Simple Explanation

Large US tech companies like:

  • Google
  • Facebook/Instagram (Meta)
  • Netflix
  • Amazon
  • Microsoft

earn lots of money from Kenyans, yet most of their tax is paid outside Kenya. KRA wanted to fix this.

If a company earns significant money from Kenyan customers, it should pay a fair share of tax here — even if its headquarters are abroad.

Why the US Government Stepped In

The plan relied on a global tax agreement to stop profit shifting. The US government (under Trump) resisted:

American companies should mainly be taxed by the US, not other countries.

This makes it harder for Kenya to collect extra tax locally.

Impact on Kenyan Investors & Savers

1. Less Tax Revenue → More Borrowing

  • Borrows more locally
  • Issues more Treasury Bills & Bonds
  • Adjusts other taxes

Impacts:

  • Interest rates
  • MMF returns
  • Government bond yields
  • Loan pricing

👉 Related: How Government Borrowing Affects Money Market Fund Returns in Kenya

2. Small Investors Carry More Weight

When large companies aren’t taxed fairly, governments often turn to SMEs, professionals, and salaried workers — reducing disposable income and slowing saving & investing.

3. Real Example: Teacher + MMF

If a teacher invests KES 5,000/month in an MMF, returns depend on interest rates, inflation, and government borrowing. Lower revenue → higher borrowing → yields can fluctuate.

Impact on NSE & Long-Term Investing

  • Slower infrastructure spending
  • Companies linked to government contracts affected
  • Market confidence may shift

👉 Related: Common Mistakes New Traders Should Avoid on the NSE

Pros & Cons of Kenya’s Tax Plan

Aspect Pros Cons
Taxing global firms Fair contribution Tough in global politics
Using global tax rules Alignment with international norms Pushback from big countries
Protecting national revenue Potential revenue boost Enforcement challenges

Smart Kenyan Investors Should:

  • Diversify savings (MMFs, SACCOs, NSE, Fixed Income)
  • Track economic indicators
  • Plan for long-term goals

Related Posts / Read Next

Chama vs Individual Investing in Kenya

Discover the best strategy: collective vs personal savings & investment.

Chama Contributions in Kenya

Step-by-step guide for smarter chama contributions and profit sharing.

Government Borrowing & MMF Returns

Why government borrowing impacts your savings and investments.

Common NSE Mistakes to Avoid

Protect your investments and avoid rookie mistakes on the Nairobi Securities Exchange.

About the Author

Postine Ngeli
Founder of MoneyMarketHubKenya.blogspot.com — sharing practical Kenyan finance insights on investments, MMFs, SACCOs, NSE, and savings using real examples and simple language.

Disclaimer

This article is for educational purposes only. It is not financial or tax advice. Always consult KRA, CMA, or CBK before making financial decisions. Market conditions may change.

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