Uncertainties associated with the August general election will impact on overall projected growth.
The industry last year suffered the falling commission from stocks as the price of several counters fell.
The bulk of income is earned from stock trade with the balance accruing from bond trade.
Stockbrokers are bracing for lower income in the next five months even after most of them released weak earnings for 2016 informed by low trading activity.
Industry players who spoke to Business Daily said uncertainties associated with the August general election will impact on overall projected growth.
“Between now and August we do not expect too much activity in the market, but after August 8 — depending on how the elections will go — then we could see good or bad signs,” said Sterling Capital Ltd director John Kirimi.
Mr Kirimi said as long as the general election is in the horizon, there is very little trading expected in the industry.
The industry last year suffered the falling commission from stocks as the price of several counters fell. The bulk of income is earned from stock trade with the balance accruing from bond trade.
Among the few firms that saw their earnings improve were Dyer and Blair Investment Bank with a net profit of Sh49.4 million up from the previous year’s Sh2.25 million, Genghis Capital Ltd at Sh136.47 million up from Sh22.2 million, Apex Africa Capital at Sh40.10 million up from Sh11.66 million.
Most of the firms reported drops in profit including Kestrel Capital (East Africa) Ltd’s Sh19.43 million from Sh80.14 million in 2015. Others are Renaissance Capital (Sh121.0 million last year from Sh187.55 million in 2015), Suntra Investment (Sh4.9 million from Sh10.79 million).
Many investors are said to have adopted the wait and see attitude before they commit their money.
The industry has seen sharp decline in overall traded turnover compared to 2015 when it stood at Sh418.8 billion. “The market has been very difficult, the business has been low and that’s why there has been a drop in the performance,” said Faida Investment bank founder and chairman Bob Karina.
“There have been many issues that have brought about drop in performances, which started in 2015 when interest rates shot up to 22.5 per cent and then most of the investors moved from the stock market and went to the money market,” said Mr Karina.
Risk averse investors are storing their wealth in government issued bonds with corporate bonds attracting less attention.
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