NSE profits double on cost cutting

The Nairobi Securities Exchange (NSE) has seen its 2020 full year profits double to Ksh.167.9 million from Ksh.80.2 million.

The significant profit growth is largely attributable to a 25 per cent reduction in administrative expenses which cooled down to Ksh.467.2 million from Ksh.625.4 million in 2019.

This to include Ksh.83 million in savings related to staff costs and Ksh.14 million from lower product development and other costs.

Nevertheless, NSE revenues in the year were down five per cent at Ksh.548.3 million from Ksh.577.1 million last year.

The dip in revenues was attributed to reduced market activity as foreign investors for instance largely shunned the equities market over COVID-19 related volatility.

“Both local and foreign investors shifted their investments away from listed equity to other asset classes, seeking to mitigate against the declining value of their portfolios,” the NSE stated.

During the year, equities turnover was down three per cent at Ksh.149 billion from Ksh.154 billion as foreign investor participation slacked by 4.25 per cent.

Equity trading levies fell by three per cent to Ksh.369.2 million from Ksh.356.8 million with net foreign outflows sitting at Ksh.28.6 billion from inflows of Ksh.1.4 billion in 2019.

NSE’s total income was meanwhile fell by 6.4 per cent to Ksh.669.9 million as the firm’s interest income declined slightly to Ksh.36.5 million from Ksh.49.4 million.

At the same time, NSE incurred a Ksh.5.9 million comprehensive loss from the fair value reduction of an equities investment booked in 2019.

NSE expects its 2021 performance to find footing in a rebounding operating environment coupled with new listings.

“In 2021, we will focus on growing the market size through targeting listing of large state and corporate institutions, cross listings and growth of the SME segment. In addition, we expect better uptake of our new products which includes exchange traded funds, real estate instruments and our recently launched unquoted securities platform,” added the NSE.

Subsequent to the strengthened profit, the board of the NSE has recommended the payment of 53 cents per share as the company’s final dividend up from just eight cents in 2019.