This archive report was first published on 11 August 2019.
On the back of a successful Sh35.7 billion buyout of KenolKobil by French firm Rubis Energie, SBG Securities, a subsidiary of Stanbic Holdings, recorded a 150 percent rise in net profit for the six months ended June 2019.
The firm's net profit hit Sh82.1 million, up from Sh32.8 million in the corresponding period last year. This significant increase was largely attributed to higher advisory and consultancy fees, which rose by Sh80.5 million to Sh94.3 million.
SBG Securities also cut its total expenses by Sh12.9 million to Sh115.7 million, mainly due to a fall in employee costs and other expenses. The firm was the sponsoring stockbroker and lead acceptance agent in the KenolKobil buyout, although the fees were undisclosed.
As the first market intermediary to report its half-year results, SBG Securities' performance is expected to set the tone for other stockbrokers. The industry is anticipated to report a mixed bag of results, with those relying heavily on equities trading for commissions likely to suffer due to lower traded volumes in a bearish market.
However, investment banks with strong foreign trading desks are likely to be spared the worst, as foreign investors have accounted for about 73 percent of total turnover. Intermediaries with strong bonds trading desks are also expected to reap the benefit of higher bonds turnover in the period.
According to the Nairobi Securities Exchange, traded turnover fell by 28 percent, or Sh30.2 billion, to Sh78.14 billion in the six months to June, compared to the similar period in 2018.
August 11, 2019
