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NSE Reports a Net Loss of 58% on reduced trading activity in 2019

The Nairobi Securities Exchange has reported a profit before tax of Kes.104 Million for the financial year 2019 as compared to Kes 241 Million recorded in the year 2018. Net profit declined by 58% to Kes. 80 Million over the same period in 2018. This was occasioned by a 9% decrease in revenues mainly as a result of a decline in equity trading turnover which declined by 12% from Kes.351 Billion in 2018 to
Kes.307 Billion in 2019.Equity trading levies equally declined by 12% from Kes.421.6 Million for the year ended 31 December 2018 to Kes.369.1 Million over the same period in 2019. The  NSE attributes reduced trading activity to a weak local demand side which did not complement the inter- national activity.

Bonds turnover however edged up 15.80% to settle at Kes.1.3 Trillion for the year 2019 as compared to Kes.1.1 Trillion recorded in 2018.

Interest income in the review period decreased by 23% to Kes.89.1 Million from Kes.116.3 Million recorded over a similar period in 2018 due to utilization of cash deposits on acquisition of strategic investments. Administrative expenses increased by 12% from Kes.560 Million in 2018 to Kes. 625 Million in 2019 mainly arising from a one off staff restructuring cost of Kes.52 Million in 2019. This is not expected to recur in 2020. The ATS system upgrade and the derivatives market were launched in the year. Both ATS and derivatives systems were capitalized in 2019 resulting in an increase in amortization and depreciation expenses by Kes.11.7 Million.

The Group recorded other comprehensive loss of Kes.17.2 Million for the year under review mainly comprising of Kes.18.4 Million in unrealized loss on the fair value of a quoted equity investment acquired in 2019. This was passed through Other Reserves. Total assets increased marginally by 1% from Kes.2.218 Billion as at 31 December 2018 to Kes. 2.242 Billion as at 31 December 2019.

Non controlling interest of Kes 56.1 Million as at 31 December 2019 represents the minority shareholders arising from the 61% acquisition in 2019 of an unquoted equity investment. Non current liabilities as at 31 December 2019 include Kes 35.2 Million contributions received from clearing members towards the settlement guarantee fund.

The Directors have recommended the payment of a first and final dividend for the year 2019 of Kes. 0.08 per ordinary share (2018:Kes. 0.49 per share comprising of an ordinary dividend of Kes 0.29 per share and a special dividend of Kes. 0.20 per share) and will be paid within sixty (60) days of the date of the Annual General Meeting which will be announced at a later date.