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Kenya Listed Banks FY’2020 Report

Apr 18, 2021

Following the release of the FY’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. Core Earnings per Share recorded a weighted decline of 26.8% in FY’2020, compared to a weighted growth of 8.9% recorded in FY’2019. The decline in the earnings was mainly attributable to the increased provisioning levels, which increased by 233.2% to Kshs 110.7 bn in FY’2020 from Kshs 33.2 bn in FY’2019, for the listed banking sector. Asset quality for the listed banks deteriorated, with the NPL ratio rising by 3.0% points to 13.5% in FY’2020 from 10.5% in FY’2019, and higher than the 5-year average of 9.9%. By the end of December 2020, the banking sector had restructured loans amounting to Kshs 1.6 tn (54.2% of the total banking sectors loans book) in order to offer relie...

Commercial Office Sector Q1’2021 Markets Review Note

Apr 16, 2021

Gigiri and Karen were the best performing submarkets in Q1’2021 recording rental yields of 8.3% and 8.0%, respectively compared to a market average of 6.8%     I. Commercial Office Sector In Q1’2020, the commercial office sector recorded subdued performance attributed to; i) reduced demand of office spaces as businesses restructure their operations hence scaling down, ii)oversupply in the commercial office sector which has created a bargaining chip for tenders forcing developers to reduce their prices and give discounts and concessions to attract and retain clients, iii) tough economic environment which has resulted to firms scaling down, iv) declines in occupancy spaces as businesses continue to embrace the working from home strategy. Source: Cytonn Research...

Residential Sector Q1’2021 Markets Review Note:

Apr 13, 2021

For detached units, top 3 markets were Rosslyn, Ruiru and Kitisuru, and for apartments, the top 3 markets were Westlands, South C, and Ruaka. During Q1’2021, the residential sector recorded increased activities supported by; i) increased transactional volumes following improved liquidity with gradual reopening of the economy, ii) improved access to mortgage loans thus encouraging uptake of units, and, iii) continued focus on the affordable housing agenda aimed at delivering affordable homes for Kenyans. In terms of performance, the sector recorded improvement, with y/y average total returns to investors coming in at 5.1%, up from 4.7% recorded in FY’2020. Prices in all segments saw an uptick with an overall y/y average price appreciation of 0.5% in the residential market while the y/y average rental yield recorded a 0.2% points decline to 4.7% from 4.9% recorded in FY’2020 attributed to reduced rental rates in the wake of a tough op...

Loan Funds Investments in Kenya

Apr 11, 2021

In December 2017, as part of the Big Four agenda, President Uhuru Kenyatta announced provision of Housing as one of the key pillars of the big four agenda. The specific target was provision of 500,000 houses across all the 47 counties by 2022. However, three years later the goal is far from being achieved. It is our view that the main reason why housing will remain a challenge is lack of capital for real estate, hence the focus on Loan Funds in Kenya, which can help with improving the funding crunch in our markets. In the Capital Markets Authority Soundness Report Q4’2020, the regulator maintained that as part of the post-Covid recovery period the capital markets remained a suitable option for capital raising initiatives. The report also highlighted another pu...

CMMF Fact Sheet March

Apr 8, 2021

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 MANAGERS 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 conservatively with active managemen...