Resource Centre Job Search Advice How Stock Prices Can Guide Your Job Application Choices

How Stock Prices Can Guide Your Job Application Choices

In April 2023, Kenya faced an economic downturn driven by a severe drought that significantly impacted its agricultural sector. This sector, which serves as the nation’s largest employer and contributes significantly to the country’s gross domestic product (GDP), bore the brunt of the crisis. The consequences were widespread, leading to high inflation, stagnant wages, decreased demand for goods and services, and, most notably, a surge in unemployment.

Years of development that have led to robust economic growth have spurred job creation in Kenya in the past. However, the majority of these job opportunities were concentrated in the informal sector. Unfortunately, these informal jobs were typically low-paying and inadequate to accommodate the rapidly expanding youth population.

With more than one million youth possessing secondary and tertiary education and actively seeking entry-level job opportunities, it is necessary to offer guidance on how individuals can effectively secure employment, especially in the current economic climate. In this article, we will explain how job seekers can leverage stock prices to make informed decisions when applying to companies.

The Relationship Between Stock Prices and Company Growth

Stock prices often reflect a company’s financial health, which can be useful for job seekers. When stock prices are high, it might indicate increased demand, leading companies to hire more workers.

Those interested in a career in the energy industry can look to companies like Umeme, for instance, whose stock rallied 40.3% at the Nairobi Securities Exchange (NSE) in July 2023. Umeme’s stocks are among the best-yielding in the market in terms of dividends, with its shares also rallying in the month prior to a seven-year high of Ksh17.75. As of June 2022, Umeme was valued at Ksh45 billion.

Additionally, it’s helpful to look beyond stock exchanges and examine the stocks of specific companies. One report found that among Africa’s publicly traded companies, those that are headed by women financially outperform companies with less gender-diverse C-suites. Moreover, companies with women CEOs were shown to have a 2.8% increase in their collective market capitalization.

Where To Look For Strong Company Stocks

A solid place to begin your search is through a stock market, which is often represented as an index or grouping of various stocks, such as Kenya’s own NSE-ASI. Often, investors will opt to trade indices because they’re perceived as a safer option. This is due to indices focusing on aggregates of companies and, thus, broader market movements. Other popular indices include the United States’ S&P 500, Dow Jones Industrial Average, Hong Kong’s Hang Seng Index, and the UK’s FTSE 100 Index.

As for Kenya, the NSE-ASI is a market capitalization-weighted index that represents the performance of all listed companies on the NSE, updated on a real-time basis. Acting as the benchmark index for the Kenyan stock market, it is utilized by investors, analysts, and market professionals to track the overall performance of the NSE, as well as to gauge the health of the Kenyan economy.

A few of the companies listed on the NSE-ASI are Kenya Airways (KQ), Olympia Capital Holdings (OCH), KenGen (KEGN), Centum Investment Co. (CTUM), Nairobi Business Ventures (NBV), and Safaricom (SCOM). KenGen, Centum Investment Co, and Safaricom were ranked in the 2018 top 10 best companies to work for in Kenya, with Safaricom taking the number one spot.

Other Factors For Determining Whether A Company Is The Right Fit For You

The ranking of the best companies in Kenya that we’ve just mentioned investigates five main factors that matter most to employees. These five factors can used as a rough guide for your personal job search. The first is pride and how employees feel about working in the company. Do they feel like an important part of the company? and would they recommend a friend to work for their employer. Next is culture. How well does the company’s vision and mission align with an employee’s own beliefs? Career growth, diversity, and inclusion, as well as a competitive pay package, are also other things you should consider when looking for employment.

For job seekers, monitoring stock prices can be a valuable tool in making informed decisions about where to apply. By assessing a company’s financial health and growth potential, individuals can reconcile their career aspirations with organizations poised for success in the job market.

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