NIC Capital,a subsidiary of NIC Bank,has recorded a pre-tax loss of Sh11 million in the first six months of the year... now most of us have been relocating to the likes of NIC capital because its Bank-linked hence we imagine safer. if they can make such losses then surely the others must be doomed... also how safe are bank-linked brokerage houses anyway?

He who laughs last thinks slowest..

Anybody seen the actual results not the DN report? The numbers don't make sense i.e. lower transactions has allowed many to cut staff and therfore costs. Are the losses from trading?


www.mjengakenya.blogspot.com

Kularaha..hav u seen nic capital product postfolio..it's investment bankin business that is. Ours is a small market..save for facilitating n underwrittin corporate financin n brokerage business what else would u expect?...both of which,by the way,are the worst hit since august last year? ..and limited in investment bankin experience too... Be more concerned with overall impact on NIC the bank.. Is the investment arm dead weight or worthwhile gamble?.....as earlier stated...compare with other investment banks..especially stand alone ones.

..if it is not expressly prohibited in law.. DO IT!!!!

I think NIC Capital is yet to secure the deals and thus earn the income. Our market is kinda limited to facilitation and underwriting of corporate financing. The deals and deal making also rely (in my opinion) on the networks one has within the industry. They were not part of CFC Stanbic bond deal nor are they part of the upcoming Safcom bond. Question is,how are they going to make the money?

On stockbrokers,i think things are really thick on their end. Picture this:
Total Mrkt Turnover for period Jan to May 2009 is Kshs 12.32 Billion
Assume they charge a commission of 2% on the transactions
Further assume that commission income is their core income
Then the total income attributable to all the brokerage houses (including those with
dealing divisions that trade) is Kshs 12.32B * 2%= Kshs 246 Million
There are about 18 Stockbrokerage houses and assuming they all have equal volumes of trade,then each of them will have an income of about Kshs 13.69 Million for the period Jan to May 2009. An average of Kshs 2.73 million per month.

However,70% of the total market turnover is attributable to about six of the Stockbrokerage houses. The rest share the spoils. Plus you have not factored Equity bank Custodial in the equation.

Things are thick for the stockbrokers....

@half- Empty,

You are correct

I very much conquer with jammo,Nic capital inherited a huge receivable balance from solid which emanated from improper dealing using the SBIS system,this mandated Nic capital to write off those debts on-balancesheet hence resulting to the loss.

11 million loss is a drop in the ocean some are swiming in more than 50million loss even after factoring in the revaluation of the NSE seat.