It’s moment of truth for stockbrokers

It’s crunch time for stockbrokers, as the clock ticks fast to March 31, the deadline for releasing their 2009 financial results.

New rules issued by the Capital Markets Authority last year to give investors a chance to gauge the health of market intermediaries requires stockbrokers and investment banks to publish their annual audited results.

The regulations were part of the 2009/2010 Finance Act, the legislative arm of the national budget.

With seven days to go, only a handful of the firms have published their results.

Results released so far have shown for the most part a drop in profitability, with market observers saying the trend would hold with the rest.

Among the firms that have so far registered a decline in profitability are Kingdom Securities and NIC Capital.

But Genghis Capital recorded a profit increase of 147 per cent.

Managing director Andrew Karumbo attributed this to growth in commissions it received in the bond and equity markets.

“We have built an agency network with like-minded individuals who understand the need for structure, systems and reliability,” Mr Karumbo said on Tuesday.

Over the past two years, the Nairobi Stock Exchange has witnessed reduced trading margins, as skittish investors kept off the bear market.

The market has been in a bullish mood lately, with both local and foreign investors flocking back.

This is likely to improve stockers’ fortunes.