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Recent Topicals

Kenya’s Economic Growth

Oct 23, 2016

This month S&P, a global ratings agency, upgraded its credit outlook for Kenya from negative to stable, for both local and foreign currency long-term debt citing (i) sustained economic growth, (ii) reduced political tension, and (iii) stabilizing public debt, which is currently at 58.0% of GDP. This follows the IMF downgrading its Sub-Saharan Africa economic growth prospects to 1.4%, representing a 50% drop from the 3.5% recorded in 2015, attributing the drop mainly to: Declining oil prices, which has affected key commodity exporting economies such as Nigeria, Terrorism and humanitarian crimes, and, Critical drought particularly in Lesotho, Malawi and Zambia, as the main concerns.Despite the expected drop in GDP growth for Sub-Saharan Africa, Kenya continues to record strong GDP growth, most recently coming in at 6.2% for Q2’2016. For our focus of the week, we highlight Kenya’s economic growth path: the expectations at the begi...

Hospitality Sector Report – “Sailing through the storm’’

Oct 16, 2016

Kenya’s real estate sector has continued to attract both local and international investors who aim to tap into the potential brought about by robust economic growth of 6.2% as at Q2’2016 and projected to be an average of 5.0% over the next decade, the growing middle class with higher disposable incomes, and improving infrastructure, which has opened up satellite towns for development. The hospitality sector in specific has recorded increased investment as seen through the establishment of hotel and serviced apartment developments. Hotel bed supply has been increasing at a 3% CAGR over the last 5-years, while the supply of serviced apartments in Nairobi alone has grown at a CAGR of 23.6% over the last 4 years. Some of the hotels in the development pipeline include Park-Inn by the Carlson Rezidor Hotel Group in Westlands, Best Western’s Premier Collection, The Alba and the City Lodge at the Upcoming Two Rivers Mall, which are expected to add 253 hotel beds to the supply over the next...

Kenya Listed Insurance Companies H1’2016 Report

Sep 18, 2016

Following the release of the H1’2016 results by insurance firms, we have carried out an analysis on Kenya’s insurance sector to decipher any material changes from our FY’2015 Insurance Report. In our analysis of the insurance sector, we offer our view on which insurance firms are the most attractive and stable for investment from a franchise value and from a future growth opportunity perspective. We also offer our view on the status and outlook for the sector. See our H1'2016 insurance report here. The report is themed "Given transition in the banking sector, what next for insurance?", as the insurance sector still struggles with low penetration, slowing premium growth, increased...

Diaspora: The Next Growth Frontier

Sep 11, 2016

In October last year, we had our first diaspora roadshow in the US, where our team visited several states and interacted with East Africans, who are eager to (i) know the opportunities available to them to invest back home, and (ii) find trusted partners with whom they can invest through back home. In two consecutive focus notes, we discussed the diaspora community and examined several learning and delivery points. In our Cytonn Weekly Report #40, 2015 we talked about diaspora contribution to economic growth, highlighting the importance of the diaspora, their location, needs from an investment perspective, challenges when it comes to investment in Kenya, how private sector players can position themselves to be their trusted partner, and the ultimate benefits to the Kenyan economy. In our Cytonn Weekly Report #41, 2015 we focused on how...

Kenya Banking Sector H1’2016 Report

Sep 4, 2016

Following the release of the H1’2016 results by banks, we undertook an analysis on the Kenyan Banking sector to point out any material changes from the Q1’2016 banking report. In this report, we recommend to investors 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 “Transition continues, to a more regulated, yet innovative environment” as the issues facing the banking sector, which is undergoing a transition, still persist. There are some key areas of transition, which will change the banking landscape in Kenya going forward: Increased Regulation – There has been a number of regulatory developments that seek to introduce more regulation within the banking sector. These include; The B...