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Recent Topicals

Kenya Listed Insurance Companies FY’2015 Report

Jul 4, 2017

Following the release of the FY’2015 results by insurance firms, we have carried out an analysis on Kenya’s insurance sector to decipher any material changes from our H1’2015 Insurance Report. In our analysis of the insurance sector, we recommend to our investors which insurance firms are the most attractive and stable for investment from a franchise value and from a future growth opportunity perspective. See our FY'2015 insurance report here.The report is themed "Given turbulence in banking, is all well in insurance?", as the insurance sector grapples with low penetration, slowing premium growth, increased cases of fraudulent claims and the required increase in capital following adoption of a risk based capital adequacy framework. In addition, with jitters hav...

Cytonn Corporate Governance Index

Jul 4, 2017

The Kenyan investing public has recently lost roughly Kshs 264.3 bn across various companies. As discussed in our Focus of the Week on Corporate Governance in Kenya, most of the losses appear to have been driven mainly by a failure of corporate governance. The losses are shown in the table below:.mcnTextContent p,.mcnTextContent a,.mcnTextContent li,.mcnTextContent strong{ font-size: 25px !imporant; line-height:1.6em !important;}.mcnTextContent strong{ color: 606060;}.title{ font-size: 20px; text-align: center; margin-top: 20px; margin-bottom: 20px;}.table{ float:center; margin-top:10px; margin-bottom:10px; width:95% !important;}.table thead tr td,.table .header td{ background-color:#006666 !important; color: #FFF !important;}.table thead tr td p strong, .table thead tr td p,.table .header td p strong, .table .header td p{ font-weight: normal !important; color: #FF...

Mortgage and Rental Affordability in Nairobi Metropolis

Jul 4, 2017

In September 2015, see Cytonn Report #37, we did a focus note on the mortgage market in Kenya, essentially looking at why the uptake of mortgages remained low; currently at only 22,000 mortgages for a country of 44 million people with the total mortgage values equating to 2.7% of GDP, compared to, say, South Africa, where mortgage values to GDP equal about 24.2%.For a country of 44 million people, with a population growth rate of 2.4% p.a, an effective housing deficit reported to be 200,000 per annum, with an increasing disposable income and a growing construction and real estate industry, it is a contradiction that mortgage uptake remains very low. Especially given that the real estate sector contribution to the GDP has grown from 8.0% in 2010 to 14.5% in the last quarter of 2015 while the sector’s total return remains very attractive at about 25% p.a over the last 5 years.To under...

Corporate Governance in Kenya

Jul 4, 2017

When the Capital Markets Authority, “CMA” published a “Code of Corporate Governance Practices” last month, we did a focus note on Corporate Governance in Kenya . In that focus note, we highlighted instances where potential corporate governance malpractices may have contributed to significant loses to the investing public to the tune of approximately Kshs. 257.0 bn. We then made suggestions on how to improve corporate governance. In this note, we update the count of recent losses due to corporate governance, we then review how we can improve corporate governance in this market and highlight our upcoming Corporate Governance Index.Since the March 2016 article, we have had two more instances of significant investor loses that are primarily about corporate governance and ethics - the collapse of Chase Bank and the management changes at National Bank of Kenya (NBK). Not even considering any potential deposi...

Kenyan Banking Sector

Jul 4, 2017

Following the release of the FY’2015 results by banks, we carried out an analysis on Kenya’s banking sector to decipher any material changes from our Q3’2015 banking report. In our analysis of the banking sector, we recommend to our investors which banks are the most attractive and stable for investment from a franchise value and from a future growth opportunity perspective. See report at: Cytonn Downloads.The report was themed “A Sector in Volatile Transition” to sustainable and stable growth, and two days after the report, Chase Bank, a mid-tier bank, was placed under receivership. This was the third bank in Kenya to fail over the last one year.Consequently, this week we give a quick status overview of the Kenya banking sector 2015 financial performance, explain what is going on in the se...