African Alliance to Close Brokerage Unit in Kenya
African Alliance capital markets group has announced that the firm will cease operating it’s stock brokerage unit in Kenya at the end of June 2020.
The company which traditionally focused on offering brokering services in the Nairobi bourse said yesterday it would now shift its focus to the digital, treasury and asset management space. The company will venture into this new territory early next month.
The board said the move was necessitated by declining business at the Nairobi Securities Exchange and the need to capitalize on existing gaps in the market.
“The AAKIB Board, along with management, constantly reviews the business segments in which the Company operates and as a result of the structural decline in the agency trading model in both the local and global financial markets has decided to divest from its Stockbroking activities,” the firm said in a statement.
The move comes just over a year after African Alliance, which has offices in other African countries, including Uganda, Nigeria, Ghana, Malawi, Zimbabwe, Zambia, Botswana, and Mauritius, last year announced the closure of its Ugandan brokerage business, citing low market activity.
Last year, many brokerage companies at the Nairobi bourse registered a decline in brokering commissions as the economy took a nosedive.
African Alliance saw its commission drop from Sh84.2 million in 2018 to 42.7 million in June last year, according to its half-year results.With the economy continuing to be ravaged by the pandemic, brokerage companies in the Nairobi bourse have been forced to find other ways to remain afloat.
African Alliance will do a cash refund to clients and those with holdings will be moved to a broker selected by the company and licensed by Capital Markets Authority.
The company has advised its clients to urgently reach out and transfer to broker of their choice and also select their preferred means for cash refunds.