We research widely to deliver unique insights.

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Recent Topicals

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Nyeri Real Estate Investment Opportunity

Jan 21, 2018

Over the last few years, we have been investing in the Nairobi metropolitan area. We however continuously do research in the other regions to see in what places we can undertake investments and developments on behalf of our investors. Our Real Estate Research & Deal Origination (RDO) team spends time in the target market, collecting and analyzing data to make the best investment recommendation both for our own proprietary use and to inform the investors of the trends in the markets. As such, and in line with our regional expansion strategy, we have been carrying out research on various markets across the Kenyan Counties. Currently we have covered 13 Counties, among them being Laikipia, Meru, Mombasa, Kisumu and Uasin Gishu. We have chosen Nyeri County to serve as the Mt. Kenya Regional Office due to its centrality in the region. We also target to open offices in other Counties such as Kisumu, Mombasa, Nakuru and Uasin Gishu as they remain attractive from a macroeconomic perspect...

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The Total Cost of Credit Post Rate Cap.

Jan 15, 2018

Following the recent headline on the Business Daily on the total cost of credit at 19% compared to the legislated cap at 14%, we: revisit the topic on interest rate caps by a general overview, have a look at initiatives put in place to make credit cheaper and more accessible, assess the impact on private sector credit growth, and, analyse the true cost of credit and what more can be done (see here for the Business Daily article). Section I: Revisiting the Topic on Interest Rate Caps by a General Overview We have already done four previous focus notes on the topic, namely, Interest Rate Cap is Kenya’s Brexit - Popular But...

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What Real Estate Bubble?

Dec 24, 2017

We first wrote about the commonly discussed topic of a Kenyan real estate bubble in our Focus dated March 2017, and titled ‘Is there a Real Estate Bubble in Kenya?’ It touched on characteristics and conditions precedent for a bubble, and also reviewed the United States and Ireland as case studies, concluding that the Kenyan market is not experiencing a bubble but the normal real estate cycles of rising demand, peaking market, falling market then bottoming out, and the rapid price increments witnessed were a result of low supply and high demand. We revisit the matter this week as we come close to the end of 2017, to evaluate the metrics, consider additional case studies, and review if our previously arrived at conclusion still holds. We start by defining a bubble and look at previous examples of major real estate bubbles globally, in the Baltic States, United States and Spain, focusing on the causes and how t...

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Safaricom’s 44% of NSE Market Capitalization and Portfolio Construction

Dec 18, 2017

Due to the unusual dominance of one counter in the NSE, this week we seek to examine the evolution of Safaricom’s share price and market capitalisation, its effect on the performance of the NSE, its performance in comparison to other listed Telcos in Sub Saharan Africa, how it is likely to affect portfolio construction decisions and conclude by drawing the key takeouts. The Nairobi Securities Exchange (NSE), with 62 listed companies, has a total market capitalisation of USD 23.4 bn (Kshs 2.4 tn). The 62 listed companies are classified into various sectors with the Telecommunication and Technology sector being the largest by market capitalisation, and Safaricom Limited being the only listed company in the sector. The table below indicates the number of companies in each sector and their corresponding market capitalisation.   No.

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Sub Saharan Africa Financial Services Report

Nov 19, 2017

Having established a strong research team and delivery framework in Kenya, we have now launched a Sub Saharan Africa (SSA) research coverage initiative. The initial coverage will be limited to Financial Services, which is one of our strongest research sectors, alongside real estate research. SSA has long been viewed as the next global growth frontier buoyed by improving macro-economic stability, compelling demographic trends, improved governance and ease of doing business across the continent. However, following a decline in commodity prices and slowing demand from China, the region fell behind the world economy in output, growing at 1.4% in 2016, slower than the aggregate global growth of 3.2%. The slowdown was not evenly distributed amongst countries in SSA, being mainly concentrated in commodity exporters, while more diversified economies sustained robust economic growth, with countries in East Africa including Djibouti, Ethiopia, Kenya, Rwanda and Tanzania, all recordi...

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