The investing public has been asked to share views on cost of access to market data to foster equitable access to data as the Nairobi Securities Exchange (NSE) embarks on aggressive data sales to diversify revenue.

In its latest report on markets soundness, the Capital Markets Authority (CMA) said the NSE charges an annual fee of Sh117,000 for the daily equity data sets a similar amount for data on traded bonds.

“On a daily basis, the cost translates to Sh350 per day for each data (traded equities and bonds) set.

These costs are targeted at corporates and professional investors in the market,” said CMA in a quarterly report.

The data is mainly sold to big multinational data companies such as Reuters and Bloomberg at exorbitant prices that small retail investors cannot afford.

The bourse recorded an annual revenue of approximately Sh27 million in 2019 and Sh36 million in 2020 from its data information services revenue line.

Open to concerns

The regulator says it is open to any complaints from the public on the ease of access to market information, saying it is working to accommodate evolving needs of retail investors including decentralised trading where investors do not have to visit stockbrokers.

“We  however  remain  open  to  receiving any complaints  or  concerns  on  market  data  access within the Kenyan industry for review if required by market participants,” CMA chief executive Wycliff Shammiah said.

The NSE said in a response to queries on subscription that they sell data to corporates, however, small investors can access the daily spot prices.

“The subscription you referred to is applicable to corporate clients who are not the end users i.e. portfolio managers, data vendors.

However  where a stakeholder is the end user, a retail investor,  the end of day data is available for free in a format that cannot be redistributed,” the NSE said in an email response. 

The NSE had indicated in its January market report that it intends to strengthen its data revenues in order to diversify business in a move to that could make it expensive to small investors to access information.

“On January 29th 2021, the London Stock Exchange closed takeover of Refinitiv resulted into two-thirds of its revenue coming from data business.

The NSE, on the other hand, is also focusing on aggressive data strategies as we seek to diversify our revenue,” said NSE in its January monthly bulletin.

Revenue source

The CMA is raising the concerns after major exchanges in the United States were sued by investors over high cost and unfair access to market data. The exchanges however sought to defend their revenue source which over the years has secured them gains.

Analysts at Kestrel Capital noted that while small investors have access to daily, they however lack access to historical data, which they may need to make decisions.

“I think in terms of general information, they do have fair access. The sales data is for excel formats or historical data which definitely for small investors, the cost looks high,” said Ephantus Maina of Kestrel Capital.

This as the International Organisation for Securities Commission raised an alert over lack of fair, equitable and timely access to market data by various participants in several countries.

Analysts at Suntra Investment Bank however said few retailer investors have shown interest in the detailed data.

“We try to provide them the information when they ask but most of them do not ask for much information,” said Mike Mwakio of Suntra.