NAIROBI SECURITIES EXCHANGE EYES 2ND HALF

The Nairobi securities exchange, as a company quoted on its own market, is presently looking up to the 2nd half of 2017 year to put smiles of shareholders faces.

As for the first half, says unaudited figures released this week, not much to smile about due to a number of factors.

It total income for the 6 months had grown by only 2.89% to Kes 352.3m under pressure from 9.07% decline in interest income to Kes 47.1m and 7.62% decrease in share of associated companies profit to Kes 7.52m.

This was in spite of 5.92% growth in operating income to Kes 282.6m and in Other income by 8.92% to Kes 17.1m.

Applying more pressure, administration cost rose by 8.02% to Kes 254.7m resulting in 6.56% decline in profit before tax to N99.7m.

On the surface, especially if 2016 trend holds again, this means that 2017 performance may be short of 2016 by a discomforting margin.

Not to worry because this may not be the case. First, it explained that administration cost was affected by the cost of new products within the period: Derivatives market, Exchange traded funds and M-Akiba bond.

Secondly, income from equity transactions should grow faster in the second half because of renewed interest in the market by foreign investors.

It concedes that the late 2016 introduction of interest rate caps should continue to affect interest income but deposits maturing beyond 3 months should help cushion that a bit.

In view of the decline, the directors do not recommend interim dividend but, well, let's see how it goes by year end.

NAIROBI SECURITIES EXCHANGE:
                        Kes m Half year
                                 2017.           2016
Total income.        352.3.         342.4
Operating income 282.6.         266.8
Interest income.      47.1.           51.8
Other income.          17.1.           15.7
Share of ass. Profit   7.52.         8.14
Administration.      254.7.        235.8
Profit before tax       99.7.        106.7
Profit margin %        28.3.          31.2
Working capital      864.7.        749.1

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