The Nairobi Securities Exchange (NSE) has joined a long list of listed firms that have issued a profit warning as a slowing economy hits the performance of many firms.
"The performance of the Company in 2019 was adversely affected by a challenging economic environment and reduced inflow of capital from global frontier market investors who are key participants in our market." said Mr. Geoffrey Odundo, Chief Executive, Nairobi Securities Exchange .
With this, the firm thus expects a more than 25% decline in the net profit attributable to the shareholders for the financial year ended 31st December 2019 as compared to the same period last year.
Details of the Company’s financial position will be disclosed in the financial results announcement for the year ended 31st December 2019, expected to be published by the end of March 2020.
A glimpse of how stock brokerage firms and investments banks performed in the first six months of this year, provides a view of how depressed the market has been.
A glimpse at the half-year results of most of the stockbrokers, for the period ending 3oth June, 2019, indicate a sharp decline in brokerage commissions for these players.
On the list of brokers that felt the heat of depressed trading at the Nairobi bourse include ABC Capital Limited which made a loss of KSh5.7 million as at 30th June, 2019 compared to a loss of KSh5.5 million the previous period. This is despite its brokerage commissions rising from KSh4.2 million to KSh4.5 million, a flat increase.
Genghis Capital posted a decline in brokerage commissions from KSh88.5 million in June last years to KSh75 million at the end of 31st June, 2019.
African Alliance Kenya Investment Bank also recorded a decline in brokerage commissions from KSh84.2 million in 2018 to KSh42.7 million at the end of June 2019.
Kestrel Capital (East Africa) Limited posted a massive drop in brokerage commission from KSh 295.5 million to KSh 94.9 million, becoming one of the worst hit by low trading activities at the NSE.
Old Mutual Securities Limited had a decline in brokerage commissions from KSh36 million in 2018 to KSh28.2 million at the end of the first six months of this year.
Standard Investment Bank Limited, a top dog in the stockbroking business also took a hit. The firm recorded a decline in brokerage commissions from KSh101.9 million as at 30th June 2018 to KSh77.7 million at the end of 30th June, 2019.
Francis Drummond & Company Limited, one of the oldest and most established brokerage houses at the bourse, realized a drop in brokerage commission from KSh2.1 million in 2018 to KSh1.97 million in 2019.
In its 2020-2024 strategic plan, the NSE intends to increase the number of listed firms, enhance its strategic alliances and leverage on technology.
