I think the main downside,is that for it to become profitable,it requires a lot of negative information about a company,which is not readily available in their website(investor relations)...so one has to have prior information probably from an insider,but we all know how hard this is,because junior employees know less about their company than the average broker...the ones on the board are unreachable,and are the ones abreast with all major announcements.

Before the collapse of Ngenye, Thuo and other brokerages.. it was widely speculated that brokers actually did "illegally" short sell..
..taking shares of a dormant investor..selling them during fall in prices..and buying back the same amount of shares at lowest possible price and pocketing the "profit"...the investor wouldn't get any wiser.. assuming his shares where always there..

Short trading is an efficient way of profiting on
price fluctuations..

you can actually test it on wazua's fantasy market.

ProverB,I can't prove it but I've heard the same thing.Some from very close quarters. The targets we're usually individuals who were holding shares for the long-term and didn't follow up on the money.As i heard. I can't deny its profitability.

I think it would be a bad idea to allow or enable short selling in Kenya. Our market regulator(s) and legal institutions are still too weak to curb the amount and magnitude of insider trading that would occur.

I assume there is enough of it (insider trading) already albeit the fact that short selling is not allowed. It remains a banned practice in most advanced markets.

Will need so many facilities to be put in place e.g securities lending firms to help in covering short positions,central counterpaties to avoid settlement fails etc,the CMA Act will also require various ammendments its a long shot for now,lets deal with the traditional equity and bond trading that we are used to for now...but in due time you,l be shorting all the way to the bank.