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Recent Topicals

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Ruaka Research Note 2023

Jan 22, 2023

In recent years, Ruaka has become one of the fastest growing satellite towns in the Nairobi Metropolitan Area (NMA), and has become a major centre for Real Estate investment and development. Offering relatively higher returns of up to 7.5%, compared to satellite towns average of 6.9%, as highlighted in our Annual Markets Review 2022. This has also driven a construction boom in Ruaka supported by the growing demand for residential property. Additionally, there has been a shift by investors towards satellite towns attributable to availability of cheaper land for development in these areas, coupled with improved accessibility owing to key infrastructural developments that have unlocked value for investors. In 2022, land prices in satellite towns recorded the highest capital appreciations of 11.1% and

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Unlocking New Listings on Nairobi Securities Exchange

Jan 15, 2023

The Nairobi Securities Exchange (NSE) last recorded an Initial Public Offers (IPOs) in 2015, when Stanlib Investments issued an IPO of the first Real Estate Investment Trust (Fahari-Ireit) at the bourse, managing to raise Kshs 3.6 bn against the target of Kshs 12.5 bn, 28.8% success rate. This translates to an eight year IPO drought, with the most recent activity at the bourse being the listing by introduction (meaning no money was raise) of the Local Authority Pension Trust (LAPTRUST) Imara Income Real Estate Investment Trust (I-REIT)) under the Restricted Sub-Segment in 2022. LAPTRUST will hold 100.0% of the Imara I-REIT shares with no initial offer to the public. Currently the bourse has 66 listed securities with a total market capitalization of Kshs 1.9 tn as at 13th January 2023. The bourse continues to be Safaricom dominated, with Safaricom’s market capitalization of Kshs 881.4 bn equivalent to 46.3% of the entire market capitalization. Additionally, betw...

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Ghana’s Debt Restructuring

Jan 8, 2023

Debt sustainability has been a cause for concern within the Sub-Saharan Africa (SSA) region and has been aggravated by a slow post pandemic recovery, elevated inflationary pressures and a backdrop of depreciating currencies in 2022. According to the Joint World Bank and International Monetary Fund (IMF) Debt Sustainability Analysis (DSA) as of September 2022, eight countries in the region are identified as in debt distress while 14 are at high risk of debt distress, and 16 at moderate risks of debt distress. Additionally, according to the Bloomberg Global default risk index 2022,  for the SSA countries, Ghana and Kenya are ranked 1...

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Kenya Macro Economic Review

Jan 2, 2023

      Economic Growth The Kenyan economy recorded an average growth of 5.6% in the period between January to September 2022, with Q3’2022 GDP coming in at 4.7%, adding to the 5.2% and 6.8% growth recorded in Q2’2022 and Q1’2022, respectively. The average GDP growth of 5.6% marked a decline from the 7.7% average growth recorded in a similar period in 2021. The growth in Q3’2022 was largely driven by the non-agricultural sectors, with accommodation and food, wholesale and retail trade, professional administrative and support, and finance and insurance sectors recording growths of 22.9%, 9.1%, 8.7%, and 5.3%, respectively, in Q3’2022, albeit slower than growth of 127.5%, 6.4%, 13.4%, and 11.8%, respectively recorded in Q3’2021. The growths in these sectors were supported by continued post COVID-19 economy recovery due to l...

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Hustler Fund in Kenya

Dec 26, 2022

As highlighted in our topical on Private Sector Credit Growth, Kenya’s domestic credit extended to private sector as a percentage of GDP was at 32.1% in 2020, compared to the 38.9% average for the Sub-Saharan African region, 111.2% for South Africa and 164.2% for advanced economies, highlighting the gap in credit availability for businesses. To achieve 100.0% Private Sector Credit to GDP, Kenya needs total credit to private sector of Kshs 12.1 tn, current credit to private sector is Kshs 3.4 tn, hence the current Kshs 8.7 tn deficit in credit to the private sector. The Hustler fund, if sustainable, at Kshs 50.0 bn, would only resolve 0.6% of the problem. The graph below shows domestic credit extended to the private sector over the years; Source: World Bank In 2020,

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