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Recent Topicals

Sub-Saharan Africa Regional Review

Oct 3, 2021

According to the International Monetary Fund (IMF), the Sub Saharan economy is projected to grow at a rate of 3.4% in 2021, a significant improvement from the 1.8% contraction recorded in 2020. This projection comes on the back of the increased rollout of vaccines in the region which has resulted to most countries re-opening their economies. However, SSA remains prone to a third wave of the pandemic, given the resurgence in the number of infections and the rising COVID-19 death tolls in some countries. Currency Performance In the third quarter of 2021, we have seen most Sub-Saharan currencies depreciate against the US Dollar with Nigerian Naira being the largest loser, losing 7.7% on YTD. The Zambian kwacha registered significant recovering gaining by 20.6% compared to the 42.2% depreciation recorded in Q3’2020. The strong performance...

Global Markets Review:

Oct 3, 2021

Introduction According to the July 2021 World Economic Outlook Report by the International Monetary Fund (IMF), the global economy is projected to expand by 6.0% in 2021, unchanged from the April 2021 projections. IMF projects that the new COVID-19 variants as well as the slow vaccine distribution continue to pose a risk on the global economic recovery. Advanced Economies are projected to expand by 5.6%, while Developing and Emerging Markets are projected to expand by 6.3% in 2021. The recovery of the Advanced Economies has been revised up to 5.6% from 5.1% due to the continued expected fiscal support especially in the US while that of the Developing and Emerging Markets has been revised downwards from 6.7% to 6.3% due to the lower speed of the...

Kenya Retail Report 2021

Sep 26, 2021

In November 2020, we published the Kenya Retail Report 2020 themed “E-commerce Shaping the Retail Sector,” which highlighted that the performance of the sector declined recording an average rental yield of 6.7%, 0.3% points lower than the 7.0% recorded in 2019. The subdued performance was largely attributed to; i) reduction in rental rates in a bid to attract tenants amid a tough economic environment which saw the rental rates in the sector post a 2.1% decline to Kshs 115.1 per SQFT in 2020, from Kshs 118.0 per SQFT in 2019, and, ii) reduced occupancy rates which declined by 0.7% points Y/Y from 77.3% in 2019 to 76.6% in 2020 attributable to reduced demand for physical retail space due to growing focus on e-commerce and scaling down of retailers in the wake of reduced revenue inflows. This week we will update our research with the Kenya Retail Report 2021 themed “Rapid...

The Draft CMA Investments Regulations 2021

Sep 19, 2021

The Cabinet Secretary for the National Treasury and Planning, through the Capital Markets Authority (CMA), published two draft regulations; the Capital Markets (Collective Investment Schemes) Regulations 2021 and the Capital Markets (Collective Investment Schemes) (Alternative Investment Funds) Regulations 2021. The draft regulations were published with the aim of seeking comments from the stakeholders and the general public by 24th September 2021. The proposed CIS regulations seek to update the current Collective Investment Scheme regulations given...

Kenya Listed Banks H1’2021 Report

Sep 12, 2021

Following the release of the H1’2021 results by Kenyan listed banks, the Cytonn Financial Services Research Team undertook an analysis on the financial performance of the listed banks and identified the key factors that shaped the performance of the sector. Core Earnings per Share (EPS) recorded a weighted increase of 136.0% in H1’2021, from a weighted decline of 33.6% recorded in H1’2020. The significant growth in earnings is attributable to reduced provisioning levels by the listed banks following the relatively stable business operating environment during the period. The performance in H1’2021 is however skewed by the strong performance from ABSA, KCB Group, and Equity Group, which recorded core EPS growths of 846.0%, 101.9% and 97.7%, respectively. The report is themed “Reduced Provisioning levels Spur Earnings Growth” where we assess the key factors that influenced the performance of the banking sector in H1&r...