The Nairobi Securities Exchange PLC (NSE) is set to record a steep decline in profits for the 2022 financial year according to the latest revelations.

In a statement on Monday, November 28, 2022, the management issued a profit warning for the year ending December 31, 2022, signalling a difficult period for the bourse.

The decline in profits, which will impact shareholders, has been attributed to slowed activities at the bourse as well as international factors.

“Over the course of 2022, the company’s performance was impacted on by reduced trading 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,” the management noted.

“As a result of this and based on the performance of the Company for the nine months to September 30th 2022, the Board of Directors of the NSE hereby informs its shareholders and the general public that the Company is expected to record a decline of more than 25% in the net profit attributable to shareholders of the Company for the financial year ended 31st December 2022, as compared to that for the same period ending 31st December 2021.”

This comes despite 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 five listings from the private sector.

In the first half of 2022, the NSE as a Group reported a decline of 24% in profit before tax to Ksh85.8 million while Profit after Tax fell by 48% to Ksh40.2 million from Ksh77.3 million.

The exchange, one of the largest in Africa, derives most of its income from charging levies of trading equities and bonds. During the period, its commissions from equity trading fell by 22.4% from Ksh167 million for H1 2021 to Ksh129.8 million in H1 2022. Equity turnover for the period stood at Ksh54 billion in H1 2022, compared to Ksh69.7 Billion in the same period in 2021.

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