Nairobi-based financial services firm EFG Hermes Kenya has shut down its brokerage retail business due to “challenges in the economic landscape that have impacted business and volumes.”
- •The Kenya unit is a subsidiary of the multinational EFG Group, which is active across the MENA region and begun operations in 2017.
- •In the multinational’s 2024 financial results, it indicated that “Kenya and Nigeria ended the year with impressive gains in terms of both performance and volumes.”
- •The development marks a significant pivot for the firm, which launched its EFG Hermes One mobile app targeting retail investors in 2021.
“This decision has been driven by ongoing challenges in the economic landscape that have impacted business volumes. As a result, we will be focusing our efforts exclusively on our institutional business, which will continue to operate,” the brokerage firm said in an email to its clients and seen by The Kenyan Wall Street.
“The Kenyan market outperformed most African markets in 2024, with the NASI gaining 15.3% in 4Q24 and marking a 34.1% Y-o-Y. This was driven primarily by the improved macroeconomic outlook and gains in larger cap stocks,” the company said in its results.
The stockbroker ranked second among stockbrokers in the last quarter of 2024, with a market share of 25.7%, but first for the year as a whole, with a market share of 41.5% with executions of KSh 43.9bn.
“Our expansion into the retail space is part of our commitment to growing our services in the African continent,” Ali Khalpey, EFG Hermes Frontier CEO, said when the firm launched its retail-focused app in 2021. The firm has now offered to help its clients in the liquidation or transfer of assets to other brokers.
The development coincides with an ongoing feud between the Nairobi Securities Exchange and stockbrokers over the former’s plan to build a direct route for retail investors to invest and trade in stocks. Stockbrokers, who are also shareholders in the bourse, see the Direct Market Access (DMA) plan as a direct threat to their traditional intermediation role and commission-based revenue model.
