The companies are implementing cost cutting measures as business dips, a stark contrast to four years ago when all registered stocks traders were expanding, opening branches across Kenya and others were opening filed offices across the capital Nairobi to serve multitudes of people buying stocks.

Industry sources now indicate that income mainly derived from commissions charged on customer transactions have gone down 75%, forcing many in the sector to trim down in order to survive.

“The situation is getting worse by the day as less and less activity is recorded at the NSE and as investor confidence in integrity of brokerage firms wanes,” said Irungu Nduati, a broker with a Nairobi firm.

“The situation is compounded by sluggish economic growth, a dip in share prices and a diminishing confidence in stock brokers some of whom have gone under with investor funds”.

Nduati said that many companies were laying off staff to cope with low business - a situation he said will continue into the foreseeable future.

Retrenchment

One of the biggest players, CFCStanbic investment bank closed five branches across Kenya and sent home 40 employees over lack of business and reduced profits last week.

The company only retained its Nairobi main office where those doing business at the NSE will have to visit beginning next month to carry out transactions.

The move came as other firms including Suntra, Dyer&Blair investment banks also shut down their banking halls established in the capital at the height of trading boom at the NSE three years ago.

Experts say that collapse of three companies - Nyaga stock brokers, Discount securities and Francis Thuo & partners - last year with millions of shillings in investor funds, have eroded public confidence in the stock market allowing apathy to set in.

“This is what is killing most members (investment banks and stock broker firms) of the NSE and many will shut down or downsize to survive” Nduati said.

Three years ago an enlightened public flooded the firms’ offices in their thousands to participate in Initial Public Offering (IPOs) of no more than seven companies that off-loaded shares to the public. All the firms registered oversubscription making the now struggling sector most lucrative.

Things have since changed for the worse and client complaints over illegal dealing in shares, delay in transactions and theft of customer funds are abound, our reporter said.