Nairobi Securities Exchange (NSE) traders encountered a tough terrain in 2016, with stockbrokers and investment banks recording losses or drop in returns.
An analysis of the 22 active participants at the bourse and other investment banks shows that the market bear run swept away profits of most firms, leading to a combined loss.
For new entrant Barclays Finance Services, a wholly-owned subsidiary of Barclays Bank of Kenya, its first year on the exchange began with a loss of Sh10.81 million.
In a year that market capitalisation – a product of share price and number of listed shares – shrunk to Sh1.96 trillion from Sh2.05 trillion in 2015, leading traders also had it rough in making money.
Prominent firms including Old Mutual Securities, SBG Securities, Kingdom Securities, AIB Capital and Sterling Capital posted negative returns. Also in loss-making zone was Apex Africa Capital, Genghis Capital and KCB Capital.
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Genghis Capital, a market participant that had a huge exposure to Chase Bank – which was put under receivership last year – suffered the highest loss. From a profit of Sh22.2 million in 2015, it closed last year with a loss of Sh136.5 million.
Apex Africa Capital, one of the premier brokerage firms since its licensing as HAK Securities in June 1994, posted a loss of Sh40.1 million. This was from the previous year’s profit of Sh11.37 million.
Equity turnover on the NSE dropped by more than half from Sh15.1 billion in December 2015 to Sh7.1 billion in a similar period last year.
KCB Capital suffered a loss of Sh1.13 million compared to a Sh2.52 million profit the KCB Group-owned firm posted the previous year.
The Cooperative bank-owned Kingdom Securities also succumbed to a loss of Sh18.45 million in a year that saw most investment wings of banks post losses. Equity Investment Bank, however, avoided a loss but its earnings dropped.
SBG Securities closed the year with a loss of Sh7.37 million. This was a 103 per cent drop in earnings compared to a profit of Sh216.6 million in the previous year. The investment firm is owned by Stanbic Bank.
Some firms, though, posted profit, such as NIC Securities which grew its profits by 291 per cent from Sh20.37 million to Sh79.7 million. Dyer & Blair posted a profit of Sh49.4 million, a growth of about 22 times compared to Sh2.25 million in 2015
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