The performance of the Nairobi Stock Exchange before and after the implementation of Automated Trading System (ATS)

Abstract

The study was conducted with the objective of assessing the performance of the Nairobi Stock Exchange before and after the implementation of automated trading systems (ATS). A survey was carried out on 49 companies that were continuously listed at the NSE during the period of study. The data collected was on market capitalization, value of shares traded, number of shares traded, number of transactions and the NSE 20 share index. The data collected was analysed using descriptive statistics. The mean, standard deviation and variances for the pre and post ATS period were calculated and compared. The findings of the study indicated that there was remarkable growth after the implementation of the ATS in market capitalization, number of shares traded, value of shares traded, number of deals and the NSE 20 share index. The ANOVA results revealed that the growth in all the performance indicators considered was significant. Based on these research findings, it was concluded that the implementation of automated trading systems at the NSE led to improved performance of the stock market. Hence the study recommends that the NSE moves to the third phase of stock market automation by linking the stock market with the payment system to fully gain from automation.