Data revenue for NSE now overtakes bond commissions – Business Daily
Nairobi Securities Exchange (NSE) on the trading floor at the Exchange building in Nairobi on August 26, 2020. PHOTO | SALATON NJAU | NMG
The Nairobi Securities Exchange’s income from vending data surpassed commissions from bonds trading for the first time in the six months to June, backed by the increased sale of market data to institutions.
The exchange said that its income from data rose by 80 percent in the period to Sh50.3 million, eclipsed only by commissions from equities trading (Sh129.8 million) and interest income (Sh58.3 million). Bonds trading levies stood at Sh47.4 million, having gone up by 44 percent compared to the first half of 2021.
These levies were inclusive of Sh20 million which was previously earned by the Central Depository and Settlement Corporation (CDSC) but was ceded to the NSE, which is a major shareholder in the corporation.
“Our data business recorded a strong performance…in the first half of 2022 owing to an enhanced institutional sales strategy. Interest income increased by 20 percent to Sh58.3 million due to our active treasury management,” said the NSE.
The NSE gets a cut of the trading commissions levied by stockbrokers for equities and bonds trades, and also gets income through annual, initial, and additional listing fees.
It has however been looking to diversify its income in light of the falling traded turnover for equities, which has also put pressure on other market players such as stockbrokers and the CDSC.
The exchange sells a wide range of data that was previously being made available for free to investors.
Some of this data includes weekly bonds and equities statistics, real-time trading data, historical trading data, monthly statistical bulletins, and monthly statistics on investment bank and stockbroker trade volumes.
In 2020, the exchange took on the services of SCL Advisory Limited to help expand the customer base for its data business and shore up revenues from this stream.
SCL was asked to advise the bourse on how to expand its portfolio of information products and services as well as generate more value from existing and new data sets.
The NSE’s main data buyers include data vendors, investment advisors, fund managers, trading system developers, and index computing companies.