The Nairobi Securities Exchange(NSE) reported an unaudited Half-Year Net Profit of KSh 77.4 Million, a 30% reduction from KSh 110.7 Million for the six months that ended on 30th June 2020.
The Group’s revenues also fell 5% from KSh 292.4 Million in the six months ended 2020 to KSh 276.5 Million in a similar period in 2021.
NSE profits hit by reduced investor activity
This was mainly driven by a 16% drop in equity turnover, which declined from KSh 83 Billion in H1, 2020 to Kshs. 70 Billion in H1, 2021.
This led to a reduction in equity trading levies by 16% from KSh 199.8 Million in H1 2020 to KSh 167.3 Million in H1, 2021.
Bonds turnover at the NSE increased up 60% to settle at KSh 470 Billion in H1, 2021. Interest income increased by 28% from KSh 36.7 Million in 2020 to KSh46.9 Million for a similar period in 2021 due to active management of investable funds.
Administrative expenses increased by 9.6% from KSh 236.1 Million to KSh 258.8 Million in the period under review. This was mainly driven by additional costs on system enhancements to enhance the business’s cyber resilience occasioned by the virtualization of the NSE trading infrastructure.
Share of associate’s profit decreased by 96% to KSh 0.6 Million in 2021 from KSh 13.8 Million in 2020 as a result of a decline in trading activity in the equity market.
Other comprehensive profit resulted from the fair value movement of the NSE quoted investment acquired in 2019, passed through Other Reserves.
The NSE Balance Sheet size grew marginally by 6% from KSh 2.31 Billion as of 30th June 2020 to KSh 2.44 Billion in H1, 2021 owing to an increase in retained earnings resulting from the Group’s improved performance in 2020 as well as KSh 50 Million dividends receivable from investments.
The Group’s Net cash from operating activities decreased in the six months ended 30th June 2021 compared to June 2020 due to the reduced performance in the period.
“The economy is currently experiencing some level of recovery supported by improved performance of key sectors including financial services and telecommunications. This scenerio is expected to have a positive impact on our macroeconomic performance,” said Geoffrey O.Odundo, NSE Chief Executive Officer.
“With the recent launch of our Lipa na Bonga points initiative with Safaricom Plc, we are now well-positioned to increase retail investor activity in the market.
The Board of Directors does not recommend the payment of an interim dividend for the first half of the year 2021.