Nairobi Securities Exchange (NSE) - 20 Share Index and Nairobi Securities Exchange(NSE) All Share Index.

By john muchiri.

A stock market index is a measure of change over time in the stock markets using numbers or points and is usually considered to be representative of the market as a whole.
Stock market index should be read as the percentage change in its numerical value as opposed to absolute numerical value.
Example;
If  E.A cables shares were previously trading at Kshs 14.40 per share and last traded at Kshs 15.33 per share,then  this is a +6.60% change.

NSE-20 Share index
NSE -20 share index tracks only the highest market capitalization companies drawn from different industries listed in Kenya.
Stock markets indices work by combining the values of the stocks within their scope and then expressing the total value of the stock against a predetermined base value.
The value of stocks captured within a particular index can be measured in terms of their price weighted indices or their market capitalization.
The NSE -20 Share index is a price weighted index. Price weighted index is determined by adding all the share prices of the stocks captured within the index and then dividing the total by the number of shares.

Nairobi Securities Exchange All share index (NASI).
NSE All share index was introduced in january 2008 with a base value value of 100, to allow comprehensive dissemination of information to investors.This is  because NSE ALL share index gives a more comprehensive picture of the market than the NSE- 20 share index as it takes into consideration all the listed companies.
NSE All share index is a market capitalization weighted index consisting  of all the securities  on the Nairobi Securities Exchange(NSE).
NSE ALL share index incorporates all listed companies irrespective of their performance and their time of listing. It reflects the total value of all listed companies at the NSE.