We have extracted the financial summary from the abridged report of Nairobi Securities Exchange PLC listed on the Nairobi Securities Exchange under the share code NSE.ke. NSE PLC operates as a Kenyan securities exchange with a listing and a debt, equity and derivative securities trading platform.
The following is an excerpt from the abridged report;
• Total income increased by 4% from Kshs. 753 million in 2017 to Kshs. 782 million in 2018. This was driven mainly by a 2% increase in equity turnover from Kshs. 343 billion in 2017 to Kshs. 351 billion in 2018 and bonds turnover which increased by 29% from Kshs. 872 billion in 2017 to Kshs. 1,125 billion in 2018. Interest income increased by 18% from Kshs. 99 million in 2017 to Kshs. 116 million in 2018 due to prudent management of funds. Other income decreased by 15% from Kshs. 47 million in 2017 to Kshs. 40 million in 2018 mainly due to a reduction in revaluation surplus on investment property in 2018.
• Share of profit of associate increased by 64% from Kshs. 12.3 million in 2017 to Kshs. 19 million in 2018 owing to increased profitability.
• Administrative expenses increased by 13% from Kshs. 496 million in 2017 to Kshs. 560 million in 2018 mainly due to a salary review alignment and revaluation deficit on the valuation of the NSE building. This resulted in a decline in the profit for the year by 12% from Kshs. 216 million in 2017 to Kshs. 191 million in 2018.
• Total assets increased nominally by 5% from Kshs. 2.1 billion in 2017 to Kshs. 2.2 billion in 2018.
• The Group recorded a return on assets of 8.6% and a return on equity of 9.1% in 2018.
OUTLOOK FOR 2019
Our expectations on the economic activities and the general business environment in Kenya are positive going into 2019. The Government’s investment in the Big Four Agenda will create new opportunities for businesses to grow. According to the International Monetary Fund (IMF), Kenya’s GDP could grow to 6.01% due to improved performance in various sectors, including real estate, tourism, manufacturing, and agriculture.
The NSE will in the coming year focus on enhancing uptake of its various products. With the broadening of our product offering, companies can now tap into various forms of capital including debt, equity and Real Estate Investment Trusts to raise funds for their businesses. We also embarked on the full roll-out of the Ibuka program which is an incubation and accelerator platform for providing companies with visibility, capacity building and networking opportunities on a hosted basis. From a product development perspective we envisage to launch the derivatives market this year. The NSE will continue to focus on its innovative strategy and in the coming year deliver its products through more accessible digital channels.
During the year, we intend to support the issuance of the M-Akiba retail bond program and in addition promote sustainable financing through issuance of green bonds. In 2019, the NSE will strengthen its operational efficiency through optimisation of its resources and management of costs.