The Nairobi Securities Exchange PLC has issued a profit warning saying it expects to record a decline of more than 25% in the net profit for the financial year ended 31 December 2022, as compared to that for the same period ending 31st December 2021.
In a statement to shareholders, the exchange said performance was impacted by reduced trading activity in the equity and debt markets occasioned by continued economic challenges both locally and internationally, key among them the rising inflation, increase in interest rates in local and international markets and re-allocation of funds from the frontier to developed markets, on the back of rising interest rates.
Listed firms are required by the Capital Markets Authority to alert investors and the public should they expect their full-year net earnings to decline by at least 25 per cent.
The company expects to report its financial results for the year ending 31 December 2022 by the end of March 2023.
Despite the above profit warning, the exchange is focused on repositioning the market citing the recent launch of the enhanced NSE Market Place whose key initiatives will include working with the Government to increase the number of listings of state-owned enterprises by an additional 10 with a contribution of 5 listings from the private sector.
The NSE is also keen to increase the level of retail investor participation through the provision of digital platforms, enhance financial education through the use of NSE as a knowledge platform and increase the uptake of NSE products and services.
“The NSE recognizes its role as a key market infrastructure that will assist the Government in meeting some of its funding objectives, facilitate a savings culture among Kenyans through the provision of investable assets and ensure sustainability of companies’ through better oversight and strengthening of their governance structures. The Board and Management of the Company remains committed to ensuring shareholder value is delivered, through efficient cost management, continuous innovation while aggressively seeking new listings in its existing product lines, in line with the Company’s 2020-2024 Strategic Plan.” Said CEO Geoffrey Odundo.