Nairobi Securities Exchange 2019 Net Earnings to Decline by 25pct

Kenyan Equities Market Continue to Retreat

Image I Courtesy NSE

The Nairobi Securities Exchange (NSE) has said its net earnings from the year ending 31 Dec.2019 will decline by more than 25 percent on tough economic conditions in its first nine months.

“The performance of the company in 209 was adversely affected by a challenging economic environment and reduced inflow of capital from global frontier market investors,” the company said in its profit warning notice.

In its half-year results in August, the self listed company posted an 81.9 percent drop in profit attributed to the challenging business environment. It is Profit after Tax declined to KSh 24 million compared to Ksh 134 million over the same period in 2018. Revenues dropped to Ksh 288.7 million compared to Ksh 352 million in 2018.

Geoffrey Odundo, the chief executive then said, “The decline in the equity turnover was as a result of low domestic demand which saw an increase in asset allocation towards the fixed income assets.”

During the period, the firm also restructured affecting its administrative cost to Ksh 399 million from Ksh 277 million. Odundo said the cost would not be ‘expected to recur in the second half of 2019’.

NSE has witnessed the loss of key listers key among them KenolKobil after being acquired by French fuel storage and distribution company Rubis SCA . Express Kenya has mulled at delisting. However, the firm hopes to leverage more on the 22 firms that have joined their incubation programme, Ibuka, to make more listings.

The Ibuka program was launched in December 2018.

“The market has witnessed a good recovery in the last quarter of 2019 and we expect this to continue well into 2020,” said Odundo noting that with their 2020-2024 strategy whose key focus is increasing the listed companies, enhancing strategic alliances and leveraging on technology, “We are well-positioned to provide capital raising platform for potential issuers.”

Other listed firms that have declared a decline in net earnings include UAP Holdings Limited, Kenya Power, coffee grower Eaagads and BOC Kenya.