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Recent Topicals

Sub-Saharan Africa (SSA) Eurobonds Performance in 2023

Jan 14, 2024

Eurobonds are fixed income debt instruments issued in a currency other than the currency of the country or market in which they are issued, mostly denominated in a currency that is widely traded and accepted globally, like the US Dollar or the Euro. Generally, Eurobonds allow issuers to tap into a broader investor base allowing for diversification in capital sourcing. Hence, Sub-Saharan Eurobonds, of which most are listed on the London and Irish stock exchanges, allow governments and corporations to raise funds by issuing bonds in a foreign currency. Majority of countries in the region issue Eurobonds to finance maturing debt obligations, finance their budget deficits and undertake heavy infrastructural projects. In 2023, Sub-Saharan Africa (SSA) was largely excluded from the international Eurobonds market due to high interest rates demanded by investors. The only outlier was Gabon, which issued a USD 0.5 bn blue bond, but even this was an exception as it was a swap for a ch...

Currency and Interest Rates Review

Jan 7, 2024

In the first week of the year the Kenyan Shilling experienced a 0.6% depreciation against the US Dollar, closing at Kshs 157.9 as of January 5, 2024, compared to Kshs 156.9 at the beginning of the year. This adds to the 26.8%, 9.0%, and 3.6% depreciation in 2023, 2022, and 2021, respectively. Notably, this is the lowest the Kenyan Shilling has reached against the US Dollar. The ongoing depreciation is primarily fuelled by a stable dollar currency globally after gaining in 2022, a persistent current account deficit, negative trade deficit and lower inflows into the capital markets. The interest rates have seen significant increases over the last one year with the 91-day treasury bill rates getting to a high of 16.0%. In the Euro bond market, the rates have been high with Euro bonds trading at rates of over 15.0% in December 2023. The high interest rates have increased due to increased demand for cash by government as they continue to run a fiscal deficit and as they seek to g...

Kenya Listed Banks Q3’2023 Report

Dec 24, 2023

Following the release of the Q3’2023 results by Kenyan 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. For the earnings notes of the various banks, click the links below: Equity Group Q3’2023 Earnings Note KCB Group Q3’2023 Earnings Note Standard Chartered Bank Kenya Q3’2023 Earnings Note ABSA Bank Kenya Q3’2023 Earnings Note

Nairobi Metropolitan Area (NMA) Infrastructure Report 2023

Dec 17, 2023

In October 2022, we released the Nairobi Metropolitan Area Mixed-Use Developments (MUDs) Report 2022, which highlighted that Mixed-Use Developments (MUDs) recorded an average rental yield of 7.4%, which was 0.9% points higher than the 6.5% rental yield for the retail, commercial Office and residential themes in 2021. The relatively better performance was mainly attributed to; i) an improved business environment, ii) strategic and prime locations of the developments with the capability to attract prospective clients, and, iii) preference by target clients due to their convenience hence improved demand and returns to investors. This week we update our report with 2023 market research data in order to determine the progress and performance of MUDs against the market performance of single use Residential, Commercial Office, and Retail developments. Therefore, this topical will cover the following:

Nairobi Metropolitan Area (NMA) Serviced Apartments Report 2023

Nov 26, 2023

In 2022, we published the Nairobi Metropolitan Area Serviced Apartments Report 2022, which highlighted that serviced apartment’s average rental yield grew by 0.7% points to 6.2% in 2022, from 5.5% recorded in 2021. This was attributed to an increase in average monthly charges per SQM by 6.6% to Kshs 2,716 per SQM, from Kshs 2,549 per SQM recorded in 2021, coupled with an increase in occupancy levels by 4.3% to 65.8% in 2022, from 61.5% recorded in 2021. The improvement in performance was attributable to increased demand for hospitality facilities and services as a result of the reopening of the economy, the return of international flights, and the improved rent collection amounts by serviced apartments that had previously been issuing discounts to attract and maintain clients. This year, we update our report using 202...