The Nairobi Securities Exchange has recorded an 82 percent drop in its half-year profits from Ksh. 133 million registered in the first half of 2018 to Ksh. 24 million recorded this year.
The Ksh. 109 million decline in profits has been attributed to a decrease in trading at the bourse which hindered NSE’s ability to gather fees from transactions. Bond turnover in the period under review stood at Ksh.78 billion down from Ksh.108 billion reported in a similar period last year. Equity trading levies on the other hand dropped to Ksh. 187 million from Ksh. 259 million in the first half of 2018.
“The decline in the equity turnover was a result of low domestic demand which saw an increase in asset allocation towards the fixed income assets,” NSE chief executive Geoffrey Odundo said on Wednesday.
A decline in revenues also forced the bourse to lay off staff in the period under review. The restructuring however increased administrative costs at the bourse to Ksh. 329 million up from Ksh. 277 million
“NSE reviewed its administrative costs leading to a one off staff restructuring cost of Ksh.52 million. This is not expected to recur in the second half of 2019,” Mr Odundo said.
The bourse is however optimistic that the derivatives market launched in July will change its fortunes and bring back foreign investors who might invest into the Kenyan market. In this regard, the bourse has revealed that it will also increase interaction with potential investors in the last six months of the year to charm them into investing in the bourse.
NSE will also leverage the 16 companies that have joined its Ibuka programme, which gives admitted companies entrance into capital markets while guiding them to durable commercial sustainability, in order to make new listings.