NSE profit rises 34pc on market data sales

Nairobi Securities Exchange

The Nairobi Securities Exchange.

Photo credit: File | Nation Media Group

What you need to know:

  • Bourse plans to upgrade system in order to widen trade avenues.
  • Stock exchange earns Sh18 million in the year ended December 2023.
  • The NSE earns a percentage of the commissions charged by stockbrokers on equities and bonds trades.

The Nairobi Securities Exchange (NSE) reported a 34 per cent increase in net profit to Sh18.4 million in the year ended December, helped by higher revenue from sale of market data.

Turnover rose to Sh662.32 million from Sh642.76 million in the period, while expenses rose to Sh596 million from Sh550.9 million in 2022.

Despite a lower operating profit, the NSE was able to grow its bottom line due to a fall in its share of losses arising from its holdings in the Central Depository & Settlement Corporation Limited (CDSC) to Sh19.43 million from Sh46.54 million in 2022.

The NSE holds a beneficial stake of 40.5 per cent in the CDSC.

“This growth is attributed to the non-trading income growth strategy adopted by the board during the year under review and a reduced loss from our associate holding in the central depository,” said the NSE yesterday in a statement on the financial results.

“Data income experienced commendable growth, with revenues increasing from Sh93.5 million in 2022 to Sh116.6 million in 2023. Equally, interest income increased from Sh104.4 million in 2022 to Sh120.9 million during the year under review.”

Other revenue lines saw a deterioration in the year, affected by reduced trading in the market by investors.

Transaction levies from equities trades fell by 6.5 per cent to Sh211.09 million, while levies from bonds trading declined by 18.9 per cent to Sh64.4 million.

This was on account of a 6.4 per cent decline in traded turnover in equities to Sh88.2 billion in 2023, mainly due to depressed share prices, and a 13.2 percent fall in bonds turnover to Sh643 billion.

The NSE earns a percentage of the commissions charged by stockbrokers on equities and bonds trades.

The exchange is now proposing to pay its shareholders a dividend of Sh0.16 per share for the year, down from Sh0.20 per share in 2022.

The dividend, which totals Sh41.5 million, will be paid on July 31 to shareholders on the company’s register as at May 30, 2024.

Similar to 2022, part of the payout will be made from retained earnings or revenue reserves, which at the end of 2023 stood at Sh493 million (2022: Sh526.7 million).

This year, the NSE said it plans to make a capital investment to upgrade its equities trading system to enable it handle a wider array of market products and improve market liquidity.

“The upgrade will replace our ageing system and is envisioned to support new trading capabilities such as market making, fractional trading and provide for additional innovative trading techniques,” said the NSE.

The company last month named Frank Mwiti as its new chief executive officer, replacing Geoffrey Odundo whose term ended on March 1 after nine years at the helm.

Mr Mwiti will take over on May 2, with the NSE chief operating officer David Wainaina holding the post on an interim basis between March 2 and May 1.