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Recent Topicals

Real Estate Investment Trusts, REITs, as an Investment Alternative

Dec 29, 2019

Following the licencing of Cytonn Asset Managers as a Real Estate Investment Trust (REIT) Manager by the Capital Markets Authority (CMA) in February 2019, Cytonn Investments Management Plc embarked on the process of structuring a REIT for two of its projects, The Ridge in Ridgeways and RiverRun Estates in Ruiru. This move was aimed at bringing access to high-yielding investments to investors in the regulated markets as well as diversifying funding sources for Cytonn’s real estate pipeline.  In this regard, this week we look at REITs both as a funding method for real estate developers, as well as an alternative asset class for investors. This focus will cover the topic as outlined below: Introduction to REITs, where we cover the definition of REITs, an...

Home Ownership Savings Plan (HOSP) Update

Dec 22, 2019

This week we revisit our 15th September 2019 topical on Home Ownership Savings Plan, following the enactment of the Finance Act 2019 on 7th November 2019; the Act included Fund Managers or Investment Banks registered under the Capital Markets Act as approved institutions to hold deposits of a Home Ownership and Savings Plan (HOSP). The act will be effected as from January 2020. As such, we revisit the following: An Overview of the Affordable Housing Initiative and Home Ownership in Kenya, Background of Home Ownership Savings Plans in Kenya, Recent Development with regards to HOSP as in the Finance Act 2019, Impact of HOSP on the Affordable Housing Initiative, Areas that need to be focused on to make HOSP effective, Our Expectations Going Forward, a...

Market Post Interest Rate Cap

Dec 15, 2019

This week, we revisit the interest rate cap topic following the Presidential assent of the Finance Bill, 2019 into law, which repealed Section 33B of the Banking Act that provided for the capping of bank interest rates. We, therefore, revisit the issue of the interest rate cap, focusing on: Background of the Interest Rate Cap Legislation - What Led to its Enactment? A Recap on our Analysis on the Subject, A Review of the Effects It Has Had So Far in Kenya, Recent Developments, Our Expectations Going Forward, and Conclusion. Section I:  Background of the Interest Rate Cap Legislation - What Led to Its Enactment?  The enactment of the Banking (Amendment) Act 2015 in September 2016, that capped lending rates at 4.0% above the Central Bank Rate (CBR), and deposit rates at 70.0% of the CBR, came against a backdrop of low trust in...

Kenya Listed Banks Q3’2019 Report

Dec 8, 2019

Following the release of the Q3’2019 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, and our expectations of the banking sector for the rest of the year. The report is themed “Higher Net Interest Margins and Consolidation to Drive Growth in the Post Rate Cap Era” as we assess the key factors that influenced the performance of the banking sector in the third quarter of 2019, the key trends, the challenges banks faced, and areas that will be crucial for growth and stability of the banking sector going forward. As such, we shall address the following: Key Themes That Shaped the Banking Sector Performance in Q3’2019, Summary of The Performance of the Listed Banking Sector in Q3’2019, The Focus Areas...

Nairobi Metropolitan Area Serviced Apartments Report 2019

Nov 24, 2019

In 2018, we published the Nairobi Metropolitan Area Serviced Apartments Report, 2018, which highlighted that serviced apartments within the Nairobi Metropolitan Area(NMA) recorded average rental yield and occupancy rates of 7.4% and 79.9%, respectively, supported by an improved political environment following the conclusion of the prolonged elections which spilled over from 2017 to early 2018, and increased marketing efforts of Kenya as a travel destination by the Kenyan Government. This year, we update our report findings on serviced apartments in NMA by focusing on: Overview of the Kenyan Hospitality Sector, Introduction to Serviced Apartments, Supply and Distribution of Serviced Apartments In the Nairobi Metropolitan Area, Performance of Serviced Apartments in the Nairobi Metropolitan Area,