NSE Issues Profit Warning For Year Ending 31st December 2016

The Nairobi Securities Exchange Company has issued a profit warning informing its shareholders as well as the general public of a possible decline of more than 25 percent in the net profits attributable to the shareholders of the company for the financial year ending 31st December 2016 compared to that of the same period in December 2015.

“Taking the foregoing into account, the Board of Directors of the Company hereby informs its shareholders and the general public that based on the projections for the remainder of the year, the Company is expected to record a decline of more than 25 percent in the net profit,” read the official statement released by the NSE.

Public Statement

Over the course of 2016, the Kenyan economy and particularly the Capital Markets sector has remained resilient despite a challenging operating environment both locally and internationally. The market has recorded increased volume of traded units for the period ended 30 September 2016 as compared to the same period last year.

There continues to be significant interest from foreigners in the market, with increased trading activity particularly from large institutional investors. Though equities turnover decreased as at end of October 2016, compared to the same period in 2015, the Bond turnover increased significantly and this segment continues to register good performance.

This year has seen some new listings to boost the market, in the Alternative Investment Market Segment and the Growth Enterprise Market Segment. The Company continues to aggressively pursue new listing opportunities and the efforts should bear fruit in 2017.

Going forward, whilst continuing to encourage trade in equities and fixed income instruments, the Company has its sights set on diversification of revenue through new product offerings such as Exchange Traded Funds, Derivatives Contracts and Global Depositary Receipts.

The Company will also be leveraging on the enhanced legislative environment geared towards increasing liquidity, such as the Market Making framework, which is now in place as well as Securities Lending and Borrowing, for which regulations should be in place in due course.

The Board and Management of the Company remain committed to ensuring shareholder value is delivered, through continuous product innovation and technology enhancements while aggressively seeking new listings in its existing product lines, in line with the Company’s 2015 – 2019 Strategic Plan.

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