We research widely to deliver unique insights.

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Recent Topicals

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Understanding Exchange Rate Regimes and the performance of the Kenyan Shilling

Nov 29, 2020

Following the continued depreciation of the Kenya Shilling against the US Dollar and various sentiments being raised in the recent past with regards to currency manipulation, we decided to do a note to demystify the various currency regimes, the mechanisms under which they operate, and how countries use them to ensure currency stability. We shall also focus on the various techniques used to estimate the value of a currency and the factors that have been driving the downward performance of the Kenya shilling. In our focus on Currency and Interest Rates, where we looked at the factors that were expected to affect the performance of the Kenyan shilling against the US Dollar. We expected the currency and the interest rates to remain under pressure with the currency depreciation to continue. This mainly because of the predicted reduction in export inflows as som...

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

Nov 23, 2020

The Monetary Policy Committee (MPC) is set to meet on Thursday, 26th November 2020, to review the outcome of its previous policy decisions and recent economic developments, and to decide on the direction of the Central Bank Rate (CBR). In their previous meeting held on 29th September 2020, the committee decided to reconvene in November 2020, while highlighting that they would remain ready to reconvene earlier if necessary, as they continue to closely monitor the impact of the policy measures have had so far. Additionally, the MPC maintained the CBR at 7.00% citing that the accommodative policy stance adopted in March, April and May 2020 sittings, which saw a cumulative 125 bps 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:

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Kenya Retail Sector Report 2020

Nov 22, 2020

According to the Kenya  Retail Sector Report – 2019 themed  “Increased Market Activity to promote Retail Growth”, released in October 2019, the retail sector’s performance in key urban cities softened, recording average rental yields of 7.0% in 2019, 1.6% points lower than the 8.6% recorded in 2018, attributed to a reduction in rental rates and  surplus retail space coupled with stiff competition among malls. This week, we update those findings with the Kenya Retail Sector Report – 2020 themed “E-commerce Shaping the Retail Sector”. We conducted research in 8 nodes within the Nairobi Metropolitan Area, as well as key urban cities and regions in Kenya, including North Rift, Coastal Region, Western/Nyanza, and Mt. Kenya, and made findings based on rental yields, occupancy rates, as well as demand and supply in...

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Unit Trust Funds Performance- Q2’2020

Nov 15, 2020

Unit Trust Funds, “UTFs”, are collective investment schemes that pool money together from many investors and are managed by professional Fund Managers, who invest the pooled funds in a portfolio of securities to achieve objectives of the trust. Following the release of Unit Trust Fund Managers’ results for Q2’2020, we examine the performance of Unit Trust Funds, as 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, currently the most popular in terms of Assets Under Management, with 89.6% of the UTF market as at Q2’2020. In our previous focus on Unit Trust Funds, we looked at the Q1’2020 Performance by Unit Trust Fund Managers. In this topical, we focus on the Q2’2020 performance by Unit Trust Fund Managers, where we shall analyze the following:

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Kenya Mortgage Refinance Company Recap

Nov 8, 2020

Kenya Mortgage Refinance Company (KMRC), a treasury backed lender, began lending in September 2020, following approval to operate by the Central Bank of Kenya. The facility was established in 2018 and we have since written two topical on the same before it became operational, the Kenya Mortgage Refinancing Company Note and the Kenya Mortgage Refinancing Company Update.  In this week’s topical, we do a recap on the facility by covering the following; Overview of Housing Sector in Kenya, Home Financing in Kenya, Introduction to KMRC, The KMRC Objectives, Benefits and Challenges of KMRC, Case Study of Saudi Real Estate Refinance Company, Lessons Learnt from The Case Study, and, Conclusion.

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