Capital Markets

Bourse profit rallies 72pc on income from trading


Nairobi Securities Exchange (NSE) on the trading floor of the Exchange building. The Nairobi Securities Exchange (NSE) incubator programme, Ibuka has struggled to revive listings on the bourse more than five years since launching in December 2018. FILE PHOTO | NMG

The Nairobi Securities Exchange (NSE) recorded a 72.4 percent jump in net profit to Sh69.38 million in the first half of the year, helped by higher equities trading commissions and data sales.

The exchange saw its turnover rise by Sh16.4 million to Sh377.3 million in the period, while costs rose by Sh11.5 million to Sh287.1 million, largely on increased systems maintenance costs.

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The market has generally recorded reduced trading activity this year compared to 2022, but the half-year numbers were boosted by an extraordinary spike in monthly turnover in March (to an all-time high of Sh32.4 billion) due to British multinational Diageo’s Sh22.7 billion block purchase of an additional 118.4 million EABL shares.

The block trade helped raise the market’s traded equities turnover during the six-month period to Sh59.2 billion from Sh54.1 billion in the corresponding period last year.

The NSE banks a commission of 0.12 percent per equities trade carried out on its platform, collected as part of the commissions levied on investors by their stockbrokers.

Data vending recorded a 31 percent jump in revenue, marking it as one of the exchange’s fastest-growing revenue lines.

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“The increased turnover resulted in an increase in equity levy income by nine percent from to Sh141.6 million,” said the NSE on Wednesday.

“The data business continued to record growth with revenue increasing to Sh65.9 million from Sh50.3 million recorded in half one of 2022 owing to improved product uptake, introduction of new data sets and our partnership with an international data consultant.”

On the bonds side, revenue from commission fell by 35 percent to Sh31 million in the half-year period, due to a decrease in secondary market bonds turnover from Sh386 billion in the first half of 2022 to Sh309 billion this year.

Rising yields in the market pushed bond prices downwards, with holders of these papers opting against selling or trading them in the secondary market so as not to actualise their paper losses.

In the second half of the year, the NSE said it will rely on further diversification of income to protect its bottom line and is also targeting one listing each on its main market and exchange-traded fund segments.

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