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Recent Topicals

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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. 

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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...

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Kenya’s FY’2022/2023 Budget Review

Apr 23, 2022

On 7th April 2022, the National Treasury presented Kenya’s FY’2022/2023 National Budget, to the National Assembly two months earlier than the usual June date in a bid to provide Parliament with ample time to discuss and approve the Budget, before it winds down ahead of the upcoming August 9th elections. Additionally, the Cabinet Secretary for the National Treasury tabled the Finance Bill 2022 in Parliament for consideration and if the Parliament approves the bill, it will be forwarded for presidential assent, after which the proposals will come into effect. Notably, the total budget estimates for FY’2022/23 will increase by 10.3% to Kshs 3.3 tn from the Kshs 3.0 tn in FY’2021/2022 while the total revenue will increase by 20....

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Kenya Listed Banks FY’2021 Report

Apr 17, 2022

Following the release of the FY’2021 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. The Asset Quality for the listed banks improved in FY’2021, with the gross NPL ratio declining by 1.2% points to 12.3%, from 13.5% in FY’2020. We however note that despite this improvement in the asset quality, the NPL ratio remains higher than the 10-year average of 8.1%. The listed banks’ management quality also improved, with the Cost to Income ratio improving by 16.9% points to 56.4%, from 73.3% recorded in FY’2020, as banks continued to reduce their provisioning levels following the improved business environment during the period. Consequently, Core Earnings per Share (EPS) recorded a weighted growth of 82.9% in FY’2021, from a weighted decline of 26.8% recorded in FY&rsquo...

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Real Estate Investment Trusts (REITs) Performance in Kenya

Apr 10, 2022

Kenya’s Real Estate sector has been one of the fastest-growing sectors of the economy over the past years, growing at a compound annual growth rate of 6.4% in the past 6 years. With the onset of the COVID-19 pandemic, the sector realized a slowdown in activities with the most affected investment classes being the hospitality sector brought about by a decline in tourism arrivals and the commercial office sector, which saw people adopting the working-from-home initiative coupled with an oversupply of 6.7 mn SQFT as of 2021. As the real estate sector recovers from the pandemic effects, key challenges such as inadequate access to development financing still persist as most developers rely on bank loans as their main source of funding despite lower lending levels witnessed in Q4’2021. The gross loans advanced to the Real Estate sector decreased by 1.5% to Kshs 456.0 bn in FY’2021, from Kshs 463.0 bn in Q3’2021 according to the

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