This archive report was first published on 18 June 2020.
Published on June 18, 2020, African Alliance, a South African-based financial services group, has announced plans to exit its stockbroking business in Kenya by the end of June 2020.
The company, which traditionally focused on stock brokerage services, will now concentrate on asset management and treasury business.
African Alliance offers a range of services, including asset management, brokerage services, investment banking, investment management, unit trusts, advisory, and research.
The decision to divest from stockbroking activities was necessitated by declining business at the Nairobi Securities Exchange and the need to capitalize on existing gaps in the market.
According to a statement, the company's board and management constantly review business segments and have decided to divest from stockbroking activities due to the structural decline in the agency trading model in both local and global financial markets.
This move comes just a year after African Alliance announced the closure of its Ugandan brokerage business, citing low market activity.
Many brokerage companies at the Nairobi bourse registered a decline in brokering commissions last year as stock market activity significantly declined.
African Alliance saw its commissions drop from KSh 84.2 million in 2018 to KSh 42.7 million in June 2019, according to its half-year results.
With the continued decline in activity at the NSE, brokerage companies in Nairobi have been forced to find alternative ways to remain afloat.
African Alliance will provide a cash refund to its clients and transfer their investments to a broker selected by the company and licensed by the Capital Markets Authority.
The company has advised its clients to urgently reach out and transfer to their preferred broker and select their preferred means for cash refunds.
