Investors lost Ksh33 billion in nine months since March 2020 due to the effects of the Covid-19 pandemic.
Business Daily, on Thursday, January 14, reported that investors who have shares in various banks across the country had forfeited the annual dividends.
That was after the institutions posted profit warnings with the earmarked dividends expected to be reserved for the recovery of the companies.
"It is unlikely that you issue a profit warning and then pay a dividend because what you are trying to do is to ensure that you retain cash in the business to keep going in the challenging circumstances," stated Einstein Kihanda, an asset management officer from ICEA-Lion.File image of Nairobi Securities Exchange MarketFile
The loss is a sharp drop from the Ksh40 billion dividends that investors pocketed in 2019.
Six of the 11 banks in Kenya listed at the Nairobi Stock Exchange (NSE) have issued a profit warning with some of their chief executives noting that they have opted to suspend dividend payouts.
The banks cited a circular that was released by the Central Bank of Kenya in August 2020 advising them to opt for cash-preservation as the economy is set to rebound in 2021.
"Our priority is to preserve our cash resources as we look at the options for supporting customers during the crisis," stated one of the executives.
It is estimated that by end of November, over five million people had lost their sources of livelihoods as the pandemic disrupted business operations.
However, a report by World Bank dated January 5, 2021, indicated that Kenya's economy will rebound strongly following the global economic recess in 2020.
The report forecasts Kenya's economy to rebound by 6.9 percent in 2021 and 5.7 percent in 2022.
World Bank indicated that Kenya will experience the fastest economic rebound in East Africa with Rwanda's expected to come second at 5.7 percent in 2021.
Tanzania is expected to rebound by 5.5 percent, Uganda by 2.8 percent, and Burundi by 2 percent. The report, however, projected South Sudan's economy to contract 3.4 percent.Logo at the entrance of World Bank Building in Washington DC, USA.File
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