This archive report was first published on 24 September 2019.
As of June 30, 2019, the Nairobi Securities Exchange (NSE) had been experiencing a prolonged bear run, affecting stockbrokers and investment bankers.
According to half-year results, several stockbrokers have seen a sharp decline in brokerage commissions, a key source of income for these players.
ABC Capital Limited, for instance, made a loss of Sh 5.7 million as of June 30, 2019, despite a slight increase in brokerage commissions from Sh 4.2 million to Sh 4.5 million.
Stockbrokers earn their income from brokerage commissions, advisory/consultancy fees, and interest income.
Other affected stockbrokers include Genghis Capital, African Alliance Kenya Investment Bank, Kestrel Capital (East Africa) Limited, Old Mutual Securities Limited, and Standard Investment Bank Limited.
These firms have seen significant declines in brokerage commissions, with some experiencing massive drops.
For example, Kestrel Capital (East Africa) Limited saw a drop in brokerage commission from Sh 295.5 million to Sh 94.9 million.
Francis Drummond & Company Limited, one of the oldest and most established brokerage houses, also realized a drop in brokerage commission from Sh 2.1 million in 2018 to Sh 1.97 million in 2019.
A brokerage commission is paid to a broker that holds one's account, and includes annual fees, subscriptions for premium research, and fees to access trading platforms.
