NSE Records 40 Percent Drop in Profits With Blame Falling on Declined Equity Turnover

The Nairobi Security Exchange Limited announced its full year financial results for the year ended 31^st of December 2016 on Thursday.

The bourse recorded a drop in the full year profits by 40 percent. According to the statement, the NSE blamed the drastic drop on the decline in equity turnover by 30 percent. The equity turnover was 419 billion shillings at the same time in the year 2015 but it dropped to 294 billion shillings in 2016.

Despite the drastic fall in profits, the NSE increased its dividend payout to its shareholders or investors by 8.5 percent to 40 percent from 31.5 percent given out at the same period in 2015. The NSE says that the investors will go home with 0.27 shillings per ordinary share once approved in an AGM that is set to be held in May this year.

READ: Kenyan Shilling Weakens Against the Dollar as Market Turnover at the NSE Decline

The net profit fell to 183.8 million shillings from 305.7 million shillings recorded at the same time in 2015. The total income on the other hand dropped by 11.3 percent to 717.2 million shillings from 808.3 million shillings in 2015. The equity trading volumes dropped to 5.8 billion shillings from 6.8 billion shillings recorded in 2015.

The exchange also witnessed an increase in administrative expenses by 9 percent to 487.3 million shillings from 448.3 million shillings while the total assets increased from 1.9 billion shillings to 2.0 billion shillings, an increase by 5 percent. The interest income dropped to 95 million shillings from 101 million shillings in 2015 and the exchange blamed this on the low interest rates after the implementation of the interest rate capping law.