The Nairobi Securities Exchange (NSE) has issued a profit warning for the 2019 financial year as listed companies wobble to end the year amid a tough business environment.
According to a notice issued by NSE, the net profits for 2019 are expected to drop by more than 25 percent compared to those recorded at a similar period in 2018.
“Taking the foregoing into account, the board of director 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 net profits,” said the company.
Most companies listed at the NSE are going through financial tribulations and a series of losses with some either being placed under receivership or undergoing restructuring. The NSE has also failed to bring more companies on board, especially the Small Medium Enterprises (SMEs), hence missing out big.
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“The performance of the company was adversely affected by the challenging economic environment and the reduced inflow of capital from global frontier market investors who are key participants in our market,” said NSE.
The NSE came up with the Ibuka Program which now hosts 22 companies since its inception in 2018, December and also focusing on its data training centers.
The Ailing Economy
Kenya’s economy is ailing. Companies are closing down and tens of them are laying off employees.
In a period of six months, stats indicate that more than 20,000 Kenyans have been fired from their jobs as businesses try to cut on costs.
Most businesses are blaming the cost of doing business in Kenya, coupled with corruption that is limiting the chances of making profits.
The National Treasury, through Governor Patrick Njoroge, has told Kenyans to brace for more tough times ahead because “there is no money.”
Cash flow was at its lowest in 6 years this year following the demonetization process.
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