Mauritian financial services provider AXYS Group has taken full ownership of the stockbroker AIB-AXYS Africa, after buying the 45 percent stake held by local shareholders for Sh120 million.
The deal, according to sources familiar with the matter, was concluded in September 2024. The multinational first acquired a 55 percent stake in AIB-AXYS in 2020, spending Sh150 million to merge its local subsidiary, Apex Africa Capital, with AIB Capital, whose owners took a 45 percent interest in the amalgamated firm.
The minority investors in AIB-AXYS have now been bought out in the second transaction, giving the multinational full control of the stockbroker.
Sources told the Business Daily that the minority investors had decided to exit the stock brokerage business due to a prolonged bear market on the Nairobi Securities Exchange (NSE), which has continued to weigh heavily on brokers’ revenues by reducing trading activities.
Brokers rely heavily on fees and commissions from equity and bond trading and advisory services. The Kenyan stock market has been in a long-term bear run and is yet to hit the peak share prices and market valuations seen at the height of the previous bull market, which ended in early 2015.
“I think the downturn in the market was the major cause. We saw what has been happening on the stock market for many years and we thought it is just better to take your money and run,” said a source.
“There were mainly five principal shareholders who owned 100 percent of the shares of AIB Capital. Then after the merger with Apex Africa Capital these AIB shareholders were awarded 45 percent and AXYS shareholders were awarded 55 percent. The two companies were put together and the shareholding was apportioned that way.”
The latest deal marks continued expansion by AXYS, which entered the Kenyan market in 2015 with the acquisition of Apex Africa Capital.
AIB-AXYS Africa is part of the AXYS Group, which is based in Mauritius and has subsidiaries in Switzerland, the United Arab Emirates and Hong Kong.
The group is keen to control a larger share of trading and corporate advisory deals on the Nairobi bourse, which is largely driven by foreign investors.
The NSE registered improved performance in 2024, as evidenced by higher share prices and equities trading, which served to lift stockbrokers’ revenues.
Equity market turnover increased 20.1 percent to close the year at Sh105.97 billion, from Sh88.2 billion in 2023, while the NSE 20 Share Index surged by 33.94 percent or 509.49 points, closing at 2,010.65.
Stockbrokers normally earn a commission of between 1.5 percent and 1.8 percent per equities trade, whereas bond trades attract a commission of 0.03 percent per trade.
Other players such as the NSE, the Capital Markets Authority (CMA) and the Central Depository and Settlement Corporation (CDSC) also take a slice of the commissions.
