Nairobi Securities Exchange announced results for the full year ended 31st December 2014 with the following highlights:
- Total income increased by 32.0 percent from 622.71mn to KES 821.90mn as a result of increased equity and bond trading of 39.0 percent and 11.0 percent respectively to KES 431.0bn and 1,012.0bn respectively.
- Annual listing fees went up by 6.0 percent from KES 73.7mn to KES 78.2mn while Initial listing fees went up by 5.0 percent from KES 8.2mn to KES 8.6mn.
- Administrative expenses went up by 16.7 percent to KES 389.47mn. However, Finance costs dropped by 63.7 percent to KES 14.29mn owing to lower debt levels in 2014.
- The company’s total assets increased by 46.6 percent to KES 1.69bn whereas the company’s total liabilities fell by 66.0 percent to KES 142.0mn after the full repayment of the company’s long term debt.
- Total equity grew by 111.1 percent from KES 730.81mn to KES 1.54bn as a result of the capitalization of the bonus shares as well as the issue of new shares during the NSE IPO.
- Profit before tax went up by 16.4 percent from KES 379.50mn to KES 441.81mn owing to the 115.57mn one-off recovery of doubtful debt in 2013.
- Profit after tax went up by 22.0 percent from KES 262.42mn to 320.04mn for the year ended 2014.
The company announced a first and final dividend of KES 0.38 per share.
Our view
Increased local and foreign investor interest in Kenya raises the earning potential going forward due to increased equity and fixed income trading at the bourse. New Corporate and Government Debt issues are expected as well as new products such as the derivatives and REITS trading and new listings into the MIMS and the GEMS segment of the market. This will improve overall attractiveness and participation as well as increase transaction and listing levies.
The reduction of settlement days, the upgrade of the trading system as well as the commencement of short selling will increase liquidity at the exchange increasing turnover levels.
Positive outlook on the economy as well as a growing middle class increases the levels of disposal income that can go into investing at the exchange increasing the level of income earned by the bourse.