We research widely to deliver unique insights.

Recent Topicals

Cytonn Note on the Monetary Policy Committee (MPC) Meeting for June 2020

Jun 19, 2020

The Monetary Policy Committee (MPC) is set to meet on Thursday, 25th June 2020, to review the outcome of its previous policy decisions and recent economic developments, and to make a decision on the direction of the Central Bank Rate (CBR). In their previous meeting held on 27th May 2020, the committee decided to reconvene within a month for an early assessment of the impact of these measures and the evolution of the COVID-19 pandemic. In the last sitting, the MPC maintained the CBR at 7.00% citing that the accommodative policy stance adopted in March and April 2020 sittings, which saw a cumulative 125bps cut, was having the intended effects on the economy. This was in line with our expectations as per our MPC Note with our view having being informed by: Inflation stability, with the inflation rate having remained within the government’s target range...

CMMF Fact Sheet May 2020

Jun 18, 2020

FUND PERFORMANCE   * Percentage you can expect to earn with the fund during one year of investment on basis of the so far realized monthly returns since inception. FUND MANAGER’S REPORT AND OUTLOOK Fund Objective The Cytonn Money Market Fund is a low-risk fund that seeks to obtain a high level of current income while protecting investor’s capital and liquidity. Portfolio Strategy The portfolio objective will be to outperform the income yield available on money market call accounts and fixed deposit accounts by investing in interest-bearing securities and other short-term money market instruments. These securities are usually available to the wholesale or institutional clients. The Fund will also be managed con...

Kenya Listed Banks Q1’2020 Report

Jun 14, 2020

Following the release of the Q1’2020 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. Asset quality deteriorated in Q1’2020 with the gross NPL ratio increasing by 0.9% points to 11.3% from 10.4% in Q1’2019. This was high compared to the 5-year average of 8.5%. In accordance with IFRS 9, banks are expected to provide both for the incurred and expected credit losses. Consequently, this saw the NPL coverage increase to 57.4% in Q1’2020 from 54.5% in Q1’2019 as banks adopted a cautious stance on the back of the expected impact of the COVID-19 pandemic. The report is themed “Deteriorating Asset Quality amid the COVID-19 Operating Environment” as we assess the key factors that i...

Impact of COVID-19 on Kenya’s Real Estate Sector

Jun 7, 2020

On 15th March 2020, we wrote about the Impact of Coronavirus to the Kenyan Economy where we analysed the resultant effect on the Kenyan economy given the negative impact that the pandemic is having on international trade, the financial and commodity markets, and the global macroeconomic environment; and, The Potential Effects of COVID – 19 on Money Market Funds, where we highlighted the macro-economic environment in the country and the effects on the fixed-income market, having reported the first infection on 13th  March 2020. This week, we focus on the impact COVID-19 has had on the real estate sector where various emerging trends have shown varied implications on the different sectors of real estate. We shall therefore cover: Brief Analysis of the Real Estate Performanc...

Accelerating Funding to Affordable Housing

May 24, 2020

Kenya’s growing economy translates into an expanding middle class, thus, increasing demand for housing. According to the National Housing Corporation (NHC), the housing deficit stands at 2.0 mn and has been growing annually by approximately 200,000 units. As such the government introduced ‘provision of affordable housing’ in 2017 as one of its four key pillars for the following five years with the aim of delivering 500,000 units to alleviate the housing crisis. However, three years later, the government has only delivered approximately 228 housing units, an indicator that the target units might just be a pipe dream. The slow momentum is largely attributable to unavailability of financing for both developers and buyers alike. In our previous topicals, we have looked into government strides aimed at resolving the deficit: the establishment of Kenya Mortgage Refinancing Company,