NSE H1 profit down 54pc as bear run bites

The Nairobi Securities Exchange’s (NSE) half year profit has dipped 54 percent for the period ended June, as investors shy away from the capital markets.

During the period under review, the NSE’s after tax profit stood at Sh82 million, down from Sh175.6 million shillings a year earlier.

The results underlines the bear run that has hit the bourse with the NSE 20 share index down nine percent to 3,442.87 points having closed 2015 at 4,007.33 points.

NSE Chief Executive Officer Geoffrey Odundo said the first six months of the year have been characterized by a tough global economy.

“China’s slow down combined with a dip in commodity prices, sinking sovereign bond yields and widespread investor anxiety continued to dim the economic prospects for both emerging and frontier markets. The Nairobi Securities Exchange performance in H1 has been a reflection of these dynamics,” Mr Odundo said.

Between January and June, equity turnover dropped by 31 percent from Sh213 billion to Sh147 billion. With subdued investor participation, the NSE’s income from equity transactions declined by 31 percent to Sh176.7 million.

There was a positive for the bourse, with income from bond transaction levy increased by 39 percent from Sh13 million to Sh18 million.

Total income during the period was down 17 percent to Sh334.3 million.

The bear run has also taken its toll on investment and brokerage firms with most reporting a decline in income.

Mr Odundo said the NSE would continue focusing on product diversification to boost income.

The board did not recommend an interim dividend.