Kenyan Capital Markets Glossary: NSE, CDS, CMA, CDSC, NASI and 60+ Terms
Introduction
Start reading about Kenyan investments and abbreviations appear almost immediately:
NSE. CMA. CDSC. CDS. NASI. IPO. DPS. EPS. P/E.
Each describes a different institution, account, market process or financial measure.
Confusing them can lead to surprisingly large misunderstandings. The Capital Markets Authority is not the stock exchange. A CDS account used for listed shares is not the same thing as the CSD account on DhowCSD used for government securities. And an order entered through a broker is not automatically an executed or settled trade.
This Serrari Kenyan Capital Markets Glossary brings the vocabulary together in one beginner-friendly reference.
The definitions reflect Kenyan capital-market terminology and the market infrastructure in force through 26 August 2026, rather than simply importing US or UK market language. Current institutional roles were checked against CMA, NSE, CDSC and Central Bank of Kenya materials.
How Kenya's Capital-Market System Fits Together
At the simplest level, CMA regulates the market, while Nairobi Securities Exchange Plc provides the exchange where listed securities can trade. CDSC provides the central-depository, clearing and securities-settlement infrastructure for the exchange market. CMA specifically supervises and licenses market intermediaries and monitors institutions including the exchange and CDSC.
The Central Bank of Kenya has a separate but important role. Among other responsibilities, CBK operates DhowCSD, the infrastructure investors use to access Kenyan government Treasury bills and Treasury bonds directly or through authorised custodial institutions.
That institutional map is the easiest place to start before learning the individual terms.
CMA → Regulates and supervises
NSE → Trading venue and exchange infrastructure
CDSC → Central depository, clearing and securities settlement for exchange-traded securities
CBK / DhowCSD → Government-securities registry, investment and settlement infrastructure
Broker / Investment Bank → Provides authorised investor market access and related services
Investor → Buys, owns and sells securities
Use directional lines showing that investors typically access NSE trading through licensed intermediaries rather than directly interacting with every institution. Mobile-first, premium Serrari financial-research style.
A–Z Quick Index
| Letter | Terms |
|---|---|
| A | Accrued Interest, Ask/Offer, AUM |
| B | Bear Market, Benchmark, Bid, Board Lot, Bond, Bonus Issue, Book Closure, Book Value, Broker, Bull Market |
| C | Capital Gain, Capital Loss, CBK, CDA, CDS Account, CDSC, Clearing, Collective Investment Scheme, Corporate Action, Coupon, CSD Account, Custodian |
| D | Delivery versus Payment, DhowCSD, Dirty Price, Diversification, Dividend, Dividend Yield, DPS |
| E | EPS, Execution, Ex-Dividend |
| F | Face Value, Final Dividend, Foreign Participation, Foreign Purchases, Foreign Sales, Free Float, Fund Manager |
| I | Index, Index Points, Interim Dividend, IPO, Issuer |
| L | Last Cum-Date, Limit Order, Liquidity, Listed Company |
| M | Market Capitalisation, Market Order, Market Statistics, Maturity Date, Money Market Fund |
| N | NASI, NAV, Net Foreign Flow, NSE, NSE 10, NSE 20, NSE 25 |
| O | Ordinary Share, Order Book |
| P | P/E Ratio, Partial Fill, Payment Date, Payout Ratio, Portfolio, Preference Share, Price-to-Book |
| R | Return, Rights Issue, Risk, ROE |
| S | Settlement, Settlement Bank, Shareholder, Share Price, Special Dividend, Spread, Stock Split |
| T | T+3, Ticker, Trade Date, Trading Account, Treasury Bill, Treasury Bond, Trustee, Turnover |
| U | Unit Trust |
| V | Volume, Volatility |
| Y | Yield, Yield to Maturity |
A. Kenyan Market Institutions
Nairobi Securities Exchange Plc
Plain-English definition: The Kenyan securities exchange that provides organised markets and trading infrastructure for securities including listed equities and bonds.
Why it matters: When Kenyan financial news refers to the NSE, it normally means Nairobi Securities Exchange Plc—not India's National Stock Exchange. The NSE's current rules directory includes its Equity Trading Rules amended in July 2025 and its current index ground rules.
NSE
Plain-English definition: The common abbreviation for Nairobi Securities Exchange Plc in the Kenyan capital market.
Why it matters: It is the market venue behind NSE share prices, indices, trading activity and listed-company announcements.
CDSC — Central Depository & Settlement Corporation
Plain-English definition: The institution providing central-depository, clearing and securities-settlement infrastructure for transactions concluded on the Kenyan exchange market.
CDSC currently operates rolling T+3 settlement for equities and uses delivery-versus-payment arrangements for the exchange of securities and cash.
CBK — Central Bank of Kenya
Plain-English definition: Kenya's central bank. In capital markets, its roles include government-securities infrastructure, the domestic government-debt registry and cash-settlement infrastructure relevant to securities markets.
Why it matters: CBK's role in Treasury bills and bonds differs from the NSE/CDSC equity-market structure.
DhowCSD
Plain-English definition: CBK's digital Central Securities Depository platform for Kenyan government securities. Investors can use it to open government-securities accounts and participate in Treasury bill and Treasury bond transactions.
Why it matters: DhowCSD should not be confused with a CDSC equity CDS account.
Issuer
Plain-English definition: A company, government or other eligible entity that creates and offers a security to investors.
Why it matters: Safaricom is an issuer of shares; the Government of Kenya is an issuer of Treasury securities.
Broker
Plain-English definition: A CMA-licensed intermediary authorised to execute securities transactions for clients within the activities permitted by its licence.
Why it matters: Retail investors normally reach the NSE through an authorised trading intermediary.
Investment Bank
Plain-English definition: A licensed capital-market intermediary that may provide securities trading, corporate-finance, advisory, underwriting or other authorised investment-banking services.
Why it matters: An investment bank can provide a broader range of services than basic transaction execution, depending on its licence.
B. Accounts and Market Access
CDS Account
Plain-English definition: An electronic securities account in Kenya's central depository system used to record ownership and transactions in dematerialised securities such as NSE-listed shares.
Why it matters: Your listed shares are recorded electronically rather than represented by a paper share certificate.
CSD Account — Government Securities
Plain-English definition: An account used within CBK's central securities depository for Treasury bills and Treasury bonds. Individual investors can open CSD accounts through DhowCSD.
Why it matters: This is different from the CDS account associated with CDSC and exchange-listed equities.
CDA — Central Depository Agent
Plain-English definition: An authorised participant through which investors access specified services of the central depository system.
Why it matters: CDAs help connect individual investors to securities-account and settlement infrastructure.
Trading Account
Plain-English definition: The client relationship or account through which a licensed intermediary receives and manages your securities-trading instructions.
Why it matters: Your broker trading account and your underlying securities depository account perform different functions.
Custodian
Plain-English definition: A licensed institution responsible for safeguarding securities or other investment assets for clients and carrying out related custody functions.
Why it matters: Custody separates safekeeping of assets from investment-management decisions.
Settlement Bank
Plain-English definition: A bank participating in the cash side of securities settlement under the applicable market infrastructure.
Why it matters: Securities and cash must both move before settlement becomes final.
Listed Company
Plain-English definition: A company whose securities have been admitted to an authorised exchange and can trade under the applicable listing and trading rules.
Ticker
Plain-English definition: The short market code used to identify a listed security.
Why it matters: Tickers make securities easier to locate on price boards and trading systems.
Market Capitalisation
Plain-English definition: The market value of a company's equity, commonly calculated from its share price and the relevant number of shares outstanding.
Why it matters: Market cap helps compare the relative size of listed companies.
Free Float
Plain-English definition: Shares considered reasonably available for public trading rather than locked in strategic or otherwise restricted holdings.
Why it matters: Free float can influence liquidity and the weighting or eligibility rules of some NSE indices.
IPO — Initial Public Offering
Plain-English definition: The process through which a company offers shares to the public for the first time as part of becoming publicly held or listed.
Rights Issue
Plain-English definition: An offer giving existing shareholders the right to subscribe for additional shares, normally in proportion to their existing holdings and under stated terms.
Bonus Issue
Plain-English definition: An issue of additional shares to existing shareholders without requiring them to pay the normal subscription price.
Stock Split
Plain-English definition: A restructuring that increases the number of shares while proportionately reducing the value represented by each share, without by itself changing the company's overall equity value.
D. Trading and Market Mechanics
Bid
Plain-English definition: The price a buyer is willing to pay for a security.
Ask / Offer
Plain-English definition: The price at which a seller is willing to sell a security.
Spread
Plain-English definition: The difference between the best available bid and best available offer.
Why it matters: Wider spreads can indicate lower liquidity or higher immediate trading friction.
Order Book
Plain-English definition: The electronic collection of outstanding buy and sell orders available for matching on the trading system.
Limit Order
Plain-English definition: An order that sets a maximum buying price or minimum selling price.
Market Order
Plain-English definition: An order intended to execute against the best available executable prices rather than specifying a fixed limit price.
Current NSE equity rules recognise market orders, with market orders receiving priority over limit orders under regular matching provisions.
Execution
Plain-English definition: The point at which compatible buy and sell orders are matched and a trade is created.
Why it matters: Order submission and execution are not the same event.
Partial Fill
Plain-English definition: When only part of the quantity requested in an order executes because the full quantity is not immediately available under the order's conditions.
Liquidity
Plain-English definition: How readily a security can generally be bought or sold without requiring a large price concession or causing a significant price movement.
Volume
Plain-English definition: The number of shares or securities traded during a stated period.
Turnover
Plain-English definition: The monetary value of securities traded during a specified period.
Why it matters: Volume measures units; turnover measures value.
Trade Date
Plain-English definition: The business day on which a transaction is executed.
Clearing
Plain-English definition: The post-trade process of determining and preparing the obligations that participants must deliver for settlement.
Settlement
Plain-English definition: The completion stage where securities and the corresponding cash obligations are finally exchanged.
T+3
Plain-English definition: The current rolling equity settlement cycle operated by CDSC: settlement occurs three business days after the trade date.
Why it matters: An executed trade is not the same as a finally settled trade.
Delivery versus Payment — DvP
Plain-English definition: A settlement arrangement linking the transfer of securities to the corresponding payment so that final delivery and payment occur together.
CDSC currently describes its exchange settlement as strict DvP within the T+3 cycle.
Board Lot
Plain-English definition: The minimum tradeable quantity specified by exchange rules for a particular market board.
Current NSE equity rules were amended in July 2025, replacing the former normal-market 100-share minimum with single-security trading on the relevant equity boards.
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E. Indices and Market Statistics
Index
Plain-English definition: A statistical benchmark combining the performance of a defined basket or universe of securities.
Benchmark
Plain-English definition: A reference measure used to compare the performance of a market, portfolio or investment.
Index Points
Plain-English definition: The numerical units used to express an index level.
Why it matters: 4,000 index points do not mean a share costs KSh4,000.
Market Statistics
Plain-English definition: Measures describing market activity and valuation, such as turnover, volume, deals, market capitalisation and foreign-investor activity.
Foreign Participation
Plain-English definition: A measure of the share of market trading activity involving foreign investors.
Why it matters: High foreign participation does not automatically mean foreigners were net buyers.
Foreign Purchases
Plain-English definition: The value of qualifying securities purchases attributed to foreign investors during the stated period.
Foreign Sales
Plain-English definition: The value of qualifying securities sales attributed to foreign investors during the stated period.
Net Foreign Flow
Plain-English definition: Foreign purchases minus foreign sales.
A positive figure indicates net foreign buying for the measured market activity; a negative figure indicates net selling.
Bull Market
Plain-English definition: A sustained period in which market prices generally trend upward.
Bear Market
Plain-English definition: A sustained period characterised by generally falling market prices.
F. Dividends and Corporate Actions
Dividend
Plain-English definition: A distribution made by a company to shareholders, usually from profits or accumulated reserves and subject to applicable corporate approvals.
Interim Dividend
Plain-English definition: A dividend declared or paid before completion of the company's full annual dividend process.
Final Dividend
Plain-English definition: A dividend generally proposed following full-year results and subject to the applicable corporate approval process.
Special Dividend
Plain-English definition: An additional or unusual dividend that should not automatically be assumed to recur.
Dividend Yield
Plain-English definition: Annual dividend per share expressed as a percentage of the share price.
Why it matters: It relates cash distribution to the price of the investment.
Book Closure
Plain-English definition: The issuer's register-closing or entitlement process used to determine shareholders eligible for a corporate action.
Last Cum-Date
Plain-English definition: The final trading date on which a purchase can carry entitlement to the relevant dividend or corporate action, subject to current settlement mechanics.
Why it matters: Buying on book-closure day itself may be too late.
Ex-Dividend
Plain-English definition: The stage after the dividend entitlement has detached from the share; a buyer purchasing after the qualifying trading deadline does not receive that particular dividend.
Payment Date
Plain-English definition: The date on which an issuer expects to distribute an approved or declared dividend to qualifying shareholders.
Corporate Action
Plain-English definition: An issuer event affecting securities or shareholders, such as a dividend, rights issue, bonus issue, stock split, merger or other approved action.
G. Bonds and Fixed Income
Bond
Plain-English definition: A debt security through which an investor lends money to an issuer under specified repayment and interest terms.
Coupon
Plain-English definition: The stated interest payment associated with a coupon-paying bond, usually expressed as a percentage of its face value.
Yield
Plain-English definition: A measure of the return generated by a fixed-income security relative to its price and cash flows.
Yield to Maturity — YTM
Plain-English definition: The annualised return implied if a bond is bought at its market price, its scheduled payments are received and it is held until maturity, subject to the assumptions built into the calculation.
Treasury Bill — T-Bill
Plain-English definition: A short-term Government of Kenya security. CBK currently issues Treasury bills in 91-, 182- and 364-day tenors, subject to auction terms.
Treasury Bond — T-Bond
Plain-English definition: A medium- to long-term Government of Kenya debt security. CBK describes Treasury bonds as government securities with maturities of two years and above.
Face Value
Plain-English definition: The nominal or principal amount of a bond used to determine contractual repayment and, where applicable, coupon calculations.
Maturity Date
Plain-English definition: The date when a debt security's principal becomes due for repayment under its terms.
Accrued Interest
Plain-English definition: Coupon interest that has accumulated since the previous coupon date but has not yet been paid.
Clean Price
Plain-English definition: A bond price quoted without accrued interest.
Dirty Price
Plain-English definition: The bond's clean price plus accrued interest—the amount reflecting both the quoted price and accrued coupon entitlement.
H. Valuation and Company Performance
P/E Ratio — Price-to-Earnings Ratio
Plain-English definition: Share price divided by earnings per share.
Why it matters: It is one common way of comparing the price investors pay with the earnings generated.
Book Value
Plain-English definition: The accounting value of shareholders' equity according to a company's balance sheet.
Price-to-Book Ratio — P/B
Plain-English definition: A company's market value per share compared with its book value per share.
ROE — Return on Equity
Plain-English definition: A profitability measure comparing earnings with shareholders' equity.
Payout Ratio
Plain-English definition: The proportion of earnings distributed to shareholders as dividends.
Why it matters: It can help investors assess how much profit is being retained versus distributed.
I. Risk and Portfolio Terms
Capital Gain
Plain-English definition: The increase realised when an investment is sold for more than its relevant purchase cost.
Capital Loss
Plain-English definition: The loss realised when an investment is sold below its relevant purchase cost.
Portfolio
Plain-English definition: The collection of investments owned by an investor or managed for an investment vehicle.
Diversification
Plain-English definition: Spreading investments across different securities, sectors, asset classes or risk drivers rather than concentrating everything in one exposure.
Risk
Plain-English definition: The possibility that an investment outcome differs adversely from what the investor expected, including the possibility of losing capital or income.
Return
Plain-English definition: The gain or loss generated by an investment, potentially including both income and price movement.
Volatility
Plain-English definition: The degree to which an investment's price or return fluctuates over time.
Why it matters: Greater volatility generally means the investment value moves around more sharply.
J. Funds and Collective Investments
Collective Investment Scheme — CIS
Plain-English definition: A regulated arrangement that pools contributions from multiple investors and invests them according to shared investment objectives under professional management.
Kenya's current framework is governed by the Capital Markets Act and the Capital Markets (Collective Investment Schemes) Regulations, 2023.
Unit Trust
Plain-English definition: A form of collective investment scheme in which investors buy units representing proportional interests in a professionally managed investment portfolio.
CMA describes unit trusts as one of the main pooled-investment structures used in Kenya.
Money Market Fund — MMF
Plain-English definition: A collective investment fund whose mandate focuses primarily on money-market and other eligible short-term income instruments.
Why it matters: An MMF is an investment fund, not the same legal product as a bank savings or fixed-deposit account.
Fund Manager
Plain-English definition: The licensed professional entity responsible for managing a collective investment scheme's portfolio according to its mandate.
Trustee
Plain-English definition: The independent party responsible for specified oversight and fiduciary functions under the governing structure of a unit trust.
Kenya's CIS framework deliberately separates fund-management, custody and trustee roles.
AUM — Assets Under Management
Plain-English definition: The total market value of assets managed by a fund manager, scheme or investment business at a particular time.
Custodian — Fund Context
Plain-English definition: The independent institution holding a scheme's assets in custody rather than making the portfolio's investment decisions.
[INFOGRAPHIC 2 — FROM COMPANY TO INVESTOR: CAPITAL MARKET LANGUAGE MAP]
Creative brief: Build an interconnected journey:
COMPANY / GOVERNMENT
→ ISSUER / IPO / BOND
→ NSE or Government-Securities Market
→ BROKER / INVESTMENT BANK
→ ORDER
→ BID / OFFER / ORDER BOOK
→ EXECUTION
→ CLEARING
→ CDSC / DhowCSD where applicable
→ CDS or CSD ACCOUNT
→ INVESTOR
Then branch the investor outcome into:
Dividend / Coupon / Capital Gain or Loss
Add small callouts for CMA = regulator, CBK = government securities/central-bank infrastructure, and NSE = exchange/trading venue.
The purpose is to show that vocabulary describes different stages of one connected financial system.
How to Use This Glossary in Practice
Do not try to memorise every definition at once.
Instead, identify which group of terms applies to the question you are asking.
If an NSE order is pending, terms such as bid, offer, limit order, liquidity and execution matter.
If you are reading a dividend announcement, focus on DPS, last cum-date, book closure and payment date.
If you are analysing a company, concepts such as EPS, P/E, ROE, market capitalisation and dividend yield become more useful.
For Treasury bonds, you need a different vocabulary again: coupon, yield, YTM, accrued interest, clean price, maturity and DhowCSD.
This is also why similar-looking terms should not be treated as interchangeable. Turnover is not volume. Dividend per share is not dividend yield. Execution is not settlement. CDSC is not CMA. And a CDSC CDS account is not automatically the same account used through CBK's DhowCSD.
Frequently Asked Questions
What does NSE mean in Kenya?
NSE means Nairobi Securities Exchange Plc, Kenya's securities exchange. In Kenyan investment content, it should not be confused with India's National Stock Exchange.
What is a CDS account?
A CDS account electronically records securities held within Kenya's central-depository system, including NSE-listed shares. It replaces reliance on physical share certificates for those securities.
What is CDSC?
The Central Depository & Settlement Corporation provides depository, clearing and settlement infrastructure for the Kenyan exchange market. Its current equity settlement cycle remains T+3.
What is CMA?
The Capital Markets Authority is Kenya's statutory capital-markets regulator. It licenses and supervises market intermediaries, regulates capital-market products and market institutions, and has investor-protection and market-development responsibilities.
What is NASI?
NASI is the NSE All Share Index, a broad benchmark used to measure performance across the wider Nairobi Securities Exchange equity market.
What is the difference between CDSC and CMA?
CMA regulates and supervises the capital market. CDSC provides depository, clearing and settlement infrastructure. One is primarily the regulator; the other is market infrastructure.
What is the difference between NSE and CDSC?
NSE provides the exchange and trading environment. CDSC handles the post-trade depository, clearing and securities-settlement functions. A trade can execute on the NSE before it finally settles through the post-trade infrastructure.
Key Takeaway
Understanding capital-market vocabulary will not remove investment risk.
But it helps you ask better questions and interpret financial information correctly.
Remember the core institutional framework:
CMA → regulator
NSE → exchange and trading venue
CDSC → depository, clearing and settlement
CBK / DhowCSD → government-securities infrastructure
Then build outward from there.
Knowing whether you are looking at a price, yield, index, dividend, trade, account or settlement event is often half the work of understanding a Kenyan investment report.
