The Nairobi Security Exchange (NSE) has reported Ksh.77.4 million after tax profit for the period ended June 30, a 30 percent drop compared to the same period last year when it recorded Ksh.110.7 million.
The first half of 2021 also saw NSE’s revenue decreased by 5 percent from Ksh.292.4 million in the first half of 2020 to Kshs.276.5 million.
According to the NSE, their revenue was affected by a drop in equity turnover which declined from Ksh.83 billion to Ksh.70 billion representing a 16 percent drop.
The decline in equity turnover was result of increased allocation of capital towards the fixed income asset class. However, bonds turnover increased by 60 percent to Ksh.470 billion while the Interest Income also increased by 28 percent from Ksh.36.7 million in 2020 to Ksh.46.9 million in 2021
Due to coronavirus pandemic, NSE incurred additional costs on system enhancements in an effort to enhance digital resilience of the business occasioned by the virtualization of trading infrastructure. This resulted in a 9.6 percent increase in administrative costs from Ksh.236.1 million to Ksh.258.8 million in the period under review.
During the period, the exchange market capitalization rose by 15.6 percent to Ksh.2.702 trillion in 2021 from Ksh.2.336 trillion in 2020.
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NSE recorded additional secondary offers after Crown Paints raised Ksh.711 million through the issuance of Ksh.71.81 million additional shares, representing an oversubscription rate of 13.74 percent.
The listing of the Centum Real Estate bond valued at Ksh.3 billion and the Family Bank Medium Term Note which raised a total of Kshs.4 billion in its first tranche also improved the performance of NSE’s corporate debt market.
In the first half of the year that saw NSE list two additional Real Estate Investment Trusts (REITs), their total assets increased by 6 percent to Ksh.2.44 billion from Ksh.2.31 billion in the same period in last year.
This was as a result of an increase in retained earnings improved in 2020 and as Ksh.50 million dividend receivables from investments.
Despite the profits made this year, investors will have to wait on their dividends after the NSE Board of Directors advised against the payment of an interim dividend for the first half of the year 2021.
NSE also hinted at engaging with the government for the potential listing of state-owned enterprises as the capital markets provide a good value proposition for the Kenyan government to achieve its capital raise and wealth distribution objectives.