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Recent Topicals

Structured High Yield Investment Products

Oct 29, 2017

We first wrote about structured high yield investments products in the Cytonn Weekly Report #19 on 17th May, 2015. We revisit the topic in depth this week following social media enquiries in the public domain where we continued to get questions as to how one of our structured products, High Yield Solutions (Cytonn HYS), is able to deliver an 18% per annum return to investors. Please note that this Focus Note is meant for general information only and has been prompted by the need to provide more information about structured products and respond to questions we are getting from the general public; it is not a warranty, representation, advice or solicitation of any nature. Readers are advised in all circumstances to seek the advice of a registered investment advisor. In this Focus Note, we deal with a couple of key issues about structured high yield products: What is a Struc...

Types of Listings

Oct 22, 2017

Following Cytonn’s recent plans to list by introduction on the Nairobi Securities Exchange (NSE) after having converted to a public company, Cytonn Investment Management Plc, we got may inquiries about the listing. Consequently, we thought it best to educate the public on what it means to list a company on a securities exchange, talk about the different market segments available for companies to list on the NSE, and expound on the different types of listing. Listing a company involves making available to the investing public shares of a public company through placing the shares on an official stock exchange. Contrary to common perception, listing shares on an exchange does not always involve selling shares to raise capital but may be done for other reasons, which we discuss below. Selling shares to the public for the first time with the aim of raising capital is referred to as an Initial Public Offer (IPO), the amount being raised from the issue is known in advan...

Kenya Listed Insurance Sector H1’2017 Report

Oct 15, 2017

Following the release of the H1’2017 results by insurance firms, we have carried out an analysis on Kenya’s listed insurance companies to decipher any material changes from our FY’2016 Insurance Report. In our analysis of the insurance sector, we seek to give a view on which insurance firms are the most attractive and stable for investment from a franchise value and a future growth opportunity perspective. The report is themed "Sustaining Profitability in an Era of Heightened Regulation", as the insurance sector still struggles in the local market with low penetration levels, excessive duplication of products and increased capital requirements following full adoption of a risk based capital adequacy framework, as a result of the Insurance (Amendment) Act 2016. The Kenyan economy has experienced stable growth expanding by 5.0% in Q2’2017, higher than Q1...

Kampala Real Estate Investment Opportunity

Sep 24, 2017

With over Kshs 82 bn of projects under mandate, across 10 real estate projects all in Kenya, (see list of projects here), we are now looking to diversify to new markets in order provide investors with a diversified portfolio of investment grade real estate products. Before making any investment, our Real Estate Research & Deal Origination (RDO) team spends time in the target market, collecting and analyzing data to make the best investment recommendation. As such, and in line with our regional expansion strategy, we have been carrying out research on various markets in the Sub Saharan African region. We started with Kigali - Rwanda in 2016, and between June and July 2017, we carried out a real estate market research in Kampala – Uganda, and we currently have ongoing research in Accra – Ghana. We have chosen Kigali, Kampala and Accra as the near-term regional expa...

Kenya Listed Banks H1’2017 Report

Sep 18, 2017

Following the release of the H1’2017 results by banks, we undertook an analysis on the Kenyan Banking sector to point out any material changes from the Q1’2017 Banking Report. In our H1’2017 Banking Report, we analyze the results of the listed banks in order to determine which banks are the most attractive and stable for investment from a franchise value and from a future growth opportunity perspective. The report is themed “Transitioning to a more Disciplined and Efficient Sector” as the banking sector takes a more disciplined approach, following rising non-performing loans and the capping of interest rates, while also employing cost rationalization measures in a bid to enhance efficiency under the current operating environment of loan and deposit pricing regulatory framework. Below are some of the themes that shaped the banking sector in the first half o...