South African-based African Alliance group has announced that it will cease operating its stockbroking unit in Kenya at the end of June 2020.
The company which traditionally focused on stock brokerage services said it will now focus on asset management and treasury business.
Services offered by African Alliance include Asset Management, Brokerage Services, Investment Banking, Investment Management, Unit Trusts, Advisory and Research.
The board said the move was necessitated by declining business at the Nairobi Securities Exchange and the need to capitalize on existing gaps in the market.
“The AAKIB Board, along with management, constantly reviews the business segments in which the Company operates and as a result of the structural decline in the agency trading model in both the local and global financial markets has decided to divest from its stockbroking activities,” the firm said in a statement.
The move comes just one year after African Alliance, which has offices in other African countries, including Uganda, Nigeria, Ghana, Malawi, Zimbabwe, Zambia, Botswana, and Mauritius, announced the closure of its Ugandan brokerage business, citing low market activity.
Last year, many brokerage companies at the Nairobi bourse registered a decline in brokering commissions as stock market activity significantly declined.
African Alliance saw its commissions drop from KSh 84.2 Million in 2018 to KSh 42.7 Million in June 2019, according to its half-year results.
With the continued decline in activity at the NSE, brokerage companies in Nairobi have been forced to find other ways to remain afloat.
African Alliance will do a cash refund to clients and those that have investments in the company will be moved to a broker selected by African Alliance and licensed by Capital Markets Authority.
The company has advised its clients to urgently reach out and transfer to the broker of their choice and also select their preferred means for cash refunds.
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