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Recent Topicals

Effects of Elections on the Investments Environment in Kenya

May 29, 2022

As highlighted in our 2022 Annual Markets Outlook, elections generally pose the risk of destabilizing an economy should the resultant period be chaotic and unstable politically. This leads to a ripple effect whereby production decreases in the country due to decreased business activities. This also leads to low investor confidence in the country and leads to negative capital net flows. Investor sentiments are generally expected to be poorer with the more apprehensive and risk averse expected to sell off their investment holdings while moderate risk-appetite investors hold off on new investments.  We have previously covered topicals on the “

Public Private Partnerships (PPPs) in Kenya

May 22, 2022

The trend towards Public-Private Partnerships (PPPs) has continued to take shape with numerous developing nations across the world realizing that economic development should not be limited to the framework of either public or private sector, that the two can work together to accelerate economic development. PPPs continue to play a crucial role in improving efficiencies in delivering public services, especially narrowing the infrastructure gap. Kenya as a developing nation, has witnessed the pros of PPPs in different thematic Real Estate sectors including infrastructure, tourism, and, housing among others. This has been made possible due to shifting the development, maintenance, and operational risk on to the private sector often resulting in higher quality and overall better results as the government capitalizes on private sector expertise. We have previously covered a topical on PPPs dubbed ‘Public...

Currency Outlook

May 15, 2022

In 2022, the Kenyan shilling has continued with the depreciation trend experienced in 2021 and 2020, with the Kenyan shilling depreciating by 2.6% against the US Dollar (USD) to Kshs 116.1 as of 13th May 2022, from Kshs 113.1 recorded on 3rd January 2022. Key to note, this the lowest the Kenyan shilling has ever traded against the USD. The poor performance of the shilling is mainly attributable to the increased dollar demand by energy and general importers, with Kenya largely being a net importer. Global oil prices have also increased during the year, attributable to the persisting supply chain constraints following the COVID-19 pandemic, worsened by the current global geopolitical tensions following the Russia-Ukraine conflict, coupled with the reopening of economies globally, which has seen demand outpace fuel supply, further inflating the country’s import bill and consequently weakening the shilling. Additionally, Kenya has seen affirmation of its Long...

Status of Infrastructure in the Nairobi Metropolitan Area (NMA) - Roads, Water & Sewer Coverage

May 8, 2022

In December 2021, we released the Nairobi Metropolitan Area (NMA) Infrastructure Report 2021, which highlighted that there were 939.6 Km of ongoing road construction and rehabilitation projects valued at Kshs 162.4 bn. On the other hand, there were 99.7 Km road projects worth Kshs 4.3 bn completed in 2021. Both water and sewer connectivity increased by 1.0% points to 55.8% and 19.0% in 2020 from 54.8% and 18.0% in 2019, respectively in the NMA. Kenya’s electricity coverage also stood at 70.0%, which represents a 0.3% points increase from the 69.7% realized in 2019. These instances among many others signifies government’s efforts to better the country through infrastructure developments. 

Unit Trust Funds Performance, FY'2021

May 1, 2022

Unit Trust Funds (UTFs) are Collective Investment Schemes that pool funds from different investors and are managed by professional fund managers. The fund managers invest the pooled funds in a portfolio of securities with the aim of generating returns to meet the specific objectives of the fund. Following the release of the Capital Markets Authority (CMA) Quarterly Statistical Bulletin – FY’2021, we analyze the performance of Unit Trust Funds, as the total Assets Under Management (AUM) have been steadily increasing, and they are among the most popular investment options in the Kenyan market. In our previous focus on Unit Trust Funds, we looked at the Q3'2021 Unit Trust Funds Performance by Fund Managers. In this topical, we foc...