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Recent Topicals

Unit Trust Funds Performance, Q2'2022

Nov 6, 2022

Unit Trust Funds (UTFs) are Collective Investment Schemes that pool funds from different investors and are managed by professional fund managers. The fund managers invest the pooled funds in a portfolio of securities with the aim of generating returns to meet the specific objectives of the fund. Following the release of the Capital Markets Authority (CMA) Quarterly Statistical Bulletin-Q3’2022, we analyze the performance of Unit Trust Funds, as the total Assets Under Management (AUM) have been steadily increasing and they are among the most popular investment options in the Kenyan market. We will further analyze the performance of Money Market Funds, a product under Unit Trust Funds. In our previous focus on Unit Trust Funds, we looked at the

Nairobi Metropolitan Area Mixed-Use Developments (MUDs) Report 2022

Oct 30, 2022

In November 2021, we released the Nairobi Metropolitan Area Mixed-Use Developments (MUDs) Report 2021, which highlighted that Mixed-Use Developments (MUDs) recorded an average rental yield of 7.2%, which was 0.7% 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 the 2022 market research that was conducted in 8 nodes within the Nairobi Metropolitan Area (NMA), in order to determine the progress and performance of MUDs against the market...

Affordable Housing in Kenya

Oct 23, 2022

The former President Uhuru Kenyatta launched Kenya’s affordable housing initiative in 2017, as part of the key pillars of the ‘Big Four Agenda’ with the aim of delivering 500,000 units by December 2022. However, due to various setbacks, the government delivered less than 3,000 units through the Pangani and Park Road projects, indicating a massive deficit in the delivery. To support the initiative, President William Ruto outlined affordable housing as one of his main agenda with the aim of delivering 200,000 units per year, and a target of 5,000 units per county. Barely two months into his reign the president has; i) floated a mortgage plan that will allow tenants to own homes through monthly rental payments in the Mukuru Kwa Jenga project, and, ii) announced plans to commission an affordable housing project consisting of 5,000 units in Homa Bay County with a start date of November 2022. We have been tracking the pr...

Kenya Listed Insurance H1’2022 Report

Oct 16, 2022

Following the release of the H1’2022 results by Kenyan insurance firms, the Cytonn Financial Services Research Team undertook an analysis on the financial performance of the listed insurance companies and the key factors that drove the performance of the sector. The report is themed ‘’Improved Efficiency Cushions Insurance Sector’s Core Earnings Growth”, where we assess the main trends in the sector, and areas that will be crucial for growth and stability going forward, seeking to give a view on which insurance firms are the most attractive and stable for investment. As a result, we shall address the following: Insurance Penetration in Kenya Key Th...

Kenya’s Balance of Payments

Oct 9, 2022

Every government that takes office is concerned with policies pertaining to trade, capital flows, inflation management, the exchange rate system, economic growth, employment opportunities, and commercial policies aimed at ensuring a country's economic growth. Kenya, like any other country, aims at achieving both internal balance by promoting price stability and external balance by maintaining a balance of payment equilibrium. Key to note, Kenya’s balance of payment stood at a deficit of Kshs 120.6 bn as of Q1’2022, a 376.9% increase from a deficit of Kshs 25.3 bn in Q1’2021 mainly due to a decline in the gross official reserves which have gone into debt service. The deterioration in the balance of payment is one of the key challenges that the new administration will face hence the need to develop policies to manage it. As such, we saw it fit to focus on Kenya’s balance of payment to analyze the current state and what can be done to improve the status. We shal...