Nairobi bourse bear-run hits stock brokerage firms

At least five stock-brokerage firms have recorded losses in the first half of the year as the bear-run at the Nairobi Securities Exchange hits harder the agents.

The stock market has been on a downward spiral for over a year now, making investors slow down trading, consequently affecting the brokers who rely on commission from sales and buys.

The brokers have reported losses of between 60,000 U.S. dollars and 590,000 dollars, with income from commission dropping by up to 193 percent, an indication of stifled trading.

In its half-year results, Dyer and Blair said Monday its brokerage commissions had declined by 74.2 percent to 456,435 dollars. Total income slumped 64 percent to 930,634 dollars.

ABC Capital, similarly, posted a 193 percent drop in brokerage commissions to 20,792 dollars during the period, with its total income going down 17 percent to 67,326 dollars.

Other brokers facing turbulence are Old Mutual Securities, Kestrel Capital, Renaissance Capital, Faida Investment Bank, AIB Capital and Kingdom Securities Ltd -- all recorded drop in half-year profits due to NSE bear-run.

However, not only the brokers have been hit, the NSE itself, a listed company, announced a 54 percent drop in profit last week on reduced equity trading volumes. Net profit declined from 1.8 million dollars in 2015 for the first six months to 811,485 dollars.

Analysts have noted that it will difficult for both investors and the brokers to make money from the bourse this year due to the slump.

The investment environment at the bourse in the second-half of the year has been exacerbated by Kenya's recent capping of commercial banks' interest rates, a move that has pummeled share prices of the financial institutions at the bourse.

The stocks have lost up to 30 percent in the last three days of trading, pushing down key indices to new lows at the market that was once vibrant. Endit