Stockbrokers and Investment Bankers have been hit hard by a persistent bear run at the Nairobi Securities Exchange (NSE).
A glimpse at the half-year results of most of the stockbrokers, for the period ending 3oth June, 2019, indicate a sharp decline in brokerage commissions for these players.
On the list of brokers who are feeling the heat of depressed trading at the Nairobi bourse include ABC Capital Limited which made a loss of Sh 5.7 million as at 30th June, 2019 compared to a loss of Sh 5.5 million the previous period. This is despite its brokerage commissions rising from Sh 4.2 million to Sh 4.5 million, a flat increase.
Stockbrokers earn their income from brokerage commissions, advisory/consultancy fees and interest income.
Genghis Capital posted a decline in brokerage commissions from Sh 88.5 million in June last years to Sh 75.0 million at the end of June 31st, 2019.
African Alliance Kenya Investment Bank also recorded a decline in brokerage commissions from Sh 84.2 million in 2018 to Sh 42.7 million at the end of June 2019.
Kestrel Capital (East Africa) Limited posted a massive drop in brokerage commission from Sh 295.5 million to Sh 94.9 million, becoming one of the worst hit by low trading activities at the NSE.
Old Mutual Securities Limited had a decline in brokerage commissions from Sh 36 million in 2018 to Sh 28.2 million at the end of the first six months of this year.
Standard Investment Bank Limited, a top dog in the stockbroking business has also taken a hit. The firm recorded a decline in brokerage commissions from Sh 101.9 million as at 30th June 2018 to Sh 77.7 million at the end of 30th June, 2019.
Francis Drummond & Company Limited, one of the oldest and most established brokerage houses at the bourse, realized a drop in brokerage commission from Sh 2.1 million in 2018 to Sh 1.97 million in 2019.
A brokerage commission is paid to a broker that holds one’s account. Brokerage fees include annual fees to maintain the CDS account, subscriptions for premium research or investing data, fees to access trading platforms or even inactivity fees for infrequent trading.
