Cytonn Real Estate

At Cytonn Real Estate, we deliver quality & aspirational real estate developments that encourage great community living.

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Live in Luxury and Lead in Style!

Amara Ridge is a breath-taking, distinct & luxurious innovation landmark at the heart of Karen in Nairobi, featuring a Classic & Contemporary design. Living at the Amara Ridge means buying into the location, neighbourhood and intended lifestyle.

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SUPREME COURT STOPS AUCTION ON ALL CYTONN PROPERTIES PENDING APPEAL:

The Supreme Court of Kenya has issued a significant ruling in Petition (Application) No. E001 of 2026: Cytonn Investments Partners Four LLP & 6 Others v The Official Receiver.

The Court dismissed the Official Receiver’s Preliminary Objection and affirmed that the appeal properly invokes the Supreme Court’s jurisdiction under Article 163(4)(a) of the Constitution.

The Court found that, although the matter arises from insolvency proceedings, it also raises serious constitutional questions touching on property rights, fair hearing, and the limits of insolvency powers.

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Early applications will be prioritized. All applications are treated in strict confidence.

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Are you a developer looking for a Mezzanine funding? RCHYF is seeking to commit financing ranging between Kshs 25 million to Kshs 100 million of real estate debt financing. For projects under residential, exclusive gated communities, mixed use developments, or serviced apartment

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hotels sectors in Kileleshwa, Lavington, Kilimani, Upperhill, Westlands Ruiru, Athi River, Riverside, Ruaka and Kiambu. For more information on the application and financing process, please click here
Apply by sending your teaser summary or inquiries to [email protected]

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Experience the serene beauty of Karen at Amara Ridge. Just 30 minutes from Nairobi, yet a world away. Only ONE fully furnished villa available for rent at USD 5,400.

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Let’s bring this expertise to your projects and help them flourish. Email us at [email protected] or [email protected] to get started.

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At Cytonn, we specialize in transforming properties into thriving communities through expert Facilities and Project Management. The Alma is just one shining example of how we deliver seamless operations and exceptional standards.

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In our Cytonn Report this week, we analyzed the performance of Kenya’s Equities, Fixed Income, and Real Estate markets for the week ended, with a special focus on the Nairobi Metropolitan Area (NMA) Land 2024. Below are the highlights;

a) Fixed Income:
During the week, T-bills were oversubscribed for the fourth consecutive week, with the overall oversubscription rate coming in at 107.3%, albeit lower than the oversubscription rate of 163.7% recorded the previous week. Investors’ preference for the shorter 91-day paper persisted, with the paper receiving bids worth Kshs 10.5 bn against the offered Kshs 4.0 bn, translating to an oversubscription rate of 262.9%, albeit lower than the oversubscription rate of 313.7% recorded the previous week. The subscription rates for the 182-day and 364-day papers decreased to 110.4% and 41.8% respectively from the 193.1% and 74.4% respectively recorded the previous week. The government accepted a total of Kshs 25.6 bn worth of bids out of Kshs 25.7 bn bids received, translating to an acceptance rate of 99.5%. The yields on the government papers were on a downward trajectory, with the yields on the 364-day, 182-day, and 91-day papers decreasing by 4.8 bps, 0.7 bps, and 0.8 bps to 16.87%, 16.71%, and 15.81% respectively from 16.91%, 16.71% and 15.82% respectively recorded the previous week;

Also, during the week, the Central Bank of Kenya released the auction results for the re-opened bonds, IFB1/2023/6.5 with a tenor to maturity of 5.8 years, and a fixed coupon rate of 17.9% and IFB1/2023/17 with a tenor to maturity of 15.7 years, and a fixed coupon rate of 14.4%. The bonds were oversubscribed with the overall subscription rate coming in at 252.6%, receiving bids worth Kshs 126.3 bn against the offered Kshs 50.0 bn. The government accepted bids worth Kshs 88.7 bn, translating to an acceptance rate of 70.2%. The weighted average yield of accepted bids for the IFB1/2023/6.5 and the IFB1/2023/17 came in at 18.3% and 17.7% respectively. Notably, the average yield of 17.7% for the IFB1/2023/17 is 3.3% points higher than the average yield of 14.4% recorded the last time the bond was issued in April last year, while the average yield of 18.3% for the IFB1/2023/6.5 is 0.4% points higher than the average yield of 17.9% recorded the last time the bond was issued in November last year. With the Inflation rate at 4.3% as of July 2024, the real return of the IFB1/2023/6.5 and the IFB1/2023/17 is 14.0% and 13.4% respectively; Further, on a tax effected basis, the bonds are offering 21.5% and 20.8%, respectively;

During the week, The Energy and Petroleum Regulatory Authority (EPRA) released their monthly statement on the maximum retail fuel prices in Kenya, effective from 15th August 2024 to 14th September 2024. Notably, the maximum allowed price for Super Petrol, Diesel and Kerosene remained unchanged from the prices announced for the previous period. Consequently, Super Petrol, Diesel, and Kerosene will continue to retail at Kshs 188.8, Kshs 171.6, and Kshs 161.8 per litre respectively;

Additionally, during the week, the National Treasury gazetted the revenue and net expenditures for the first month of FY’2024/2025, ending 31st July 2024, highlighting that the total revenue collected as at the end of July 2024 amounted to Kshs 174.4 bn, equivalent to 6.6% of the revised estimates of Kshs 2,631.4 bn for FY’2024/2025 and is 79.5% of the prorated estimates of Kshs 219.3 bn;

b) Equities:
During the week, the equities market recorded mixed performance, with NSE 20 gaining the most by 0.6%; NSE 25 and NASI gained by 0.4% and 0.2% each respectively, while NSE 10, declined marginally by 0.01%, taking the YTD performance to gains of 16.6%, 14.8%, 11.4% and 8.9% for NSE 10, NSE 25, NASI, and NSE 20 respectively. The equities market performance was driven by gains recorded by large-cap stocks such as COOP Bank, BAT, and DTB-K of 11.1%, 1.9%, and 1.3% respectively. The performance was however weighed down by losses recorded by large-cap stocks such as NCBA, EABL, and KCB Group of 1.1%, 0.7%, and 0.5% respectively;

During the week, Equity Group released its H1’2024 financial results, with its Core Earnings per Share (EPS) increasing by 12.5% to Kshs 7.8 from Kshs 7.0 in H1’2024, mainly driven by the 17.2% growth in total operating income to Kshs 97.1 bn, from Kshs 82.9 bn in H1’2023. Cooperative Bank of Kenya released its H1’2024 financial results, with its Core Earnings per Share (EPS) increasing by 7.0% to Kshs 2.2, from Kshs 2.1 in H1’2023, driven by the 10.9% increase in total operating income to Kshs 39.2 bn, from Kshs 35.4 bn in H1’2023;

Also, during the week, Sanlam Kenya Holdings released their H1’2024 results, recording a significant 264.1% increase in Profit After Tax to Kshs 0.3 bn, from the Kshs 0.2 bn loss recorded in H1’2023. The performance was mainly driven by a significant 316.9% increase in insurance investment revenue to Kshs 2.3 bn, from Kshs 0.6 bn in H1’2023, and supported by a 57.5% decrease in Net expenses from reinsurance contracts held to Kshs 0.1 bn in H1’2024, from Kshs 0.5 bn in H1’2023;

c) Real Estate:
During the week, Knight Frank, an international Real Estate consultancy and management firm, released the Kenya Market Update H1’2024 Report highlighting the performance of key Real Estate sectors in the country. The report highlighted a rise in occupancy rates within the commercial office sector and an increased demand for industrial space in Kenya;

During the week, President William Ruto presided over the ground-breaking ceremony of Nyaribari Masaba Affordable Housing project in Nyaribari Masaba Constituency, Kisii County. The 244-housing unit project shall integrate social housing, affordable housing, and market housing units and will comprise 5 blocks of apartments. As well, the president Launched construction of Ogembo affordable housing project in Bomachoge Chache Constituency in Kisii County. The 200-unit housing project will employ more than 92 youths per day during the period of construction. The entire project is estimated to cost Kshs 616.4 mn;

During the week, President William Ruto oversaw ground breaking for the tarmacking of 65-Kilometre-long link roads in the area in Sombogo, Kitutu Chache and tarmacking of Metembe-Ngenyi/Bobaracho-Ititi/Rioma-Nyaore/Marani-Nyakoe Roads, Marani, Kisii County;

Under the Real Estate Investment Trusts during the week Laptrust Imara I-REIT released their H1’2024 financial performance, the REIT trustee approved an interim dividend of Kshs 0.4 per unit from the Kshs 129.9 Mn distributable earning which translated to an annualised yield rate of 3.8%. The REIT recorded a basic earnings per unit of Kshs 0.5 in H1’2024, a 63.0 % increase from 0.3 recorded in H1’2023. The performance was driven by a 63.0% increase in net earnings to Kshs 162.4 mn in H1’2024 from Kshs 99.6 mn recorded in H1’2023;

Additionally, on the Unquoted Securities Platform, Acorn D-REIT and I-REIT traded at Kshs 25.4 and Kshs 22.2 per unit, respectively, as per the last updated data on 9th August 2024. The performance represented a 27.0% and 11.0% gain for the D-REIT and I-REIT, respectively, from the Kshs 20.0 inception price. The volumes traded for the D-REIT and I-REIT came in at Kshs 12.3 mn and Kshs 31.6 mn shares, respectively, with a turnover of Kshs 311.5 mn and Kshs 702.7 mn, respectively, since inception in February 2021. Additionally, ILAM Fahari I-REIT traded at Kshs 11.0 per share as of 9th August, 2024, representing a 45.0% loss from the Kshs 20.0 inception price;

d) Focus of the Week:
In July 2023, we released the Nairobi Metropolitan Area Land Report 2023, which highlighted that the Nairobi Metropolitan Area (NMA) land sector recorded an improvement in performance with the average annual price appreciation coming in at 4.5% in FY’2022/23, 1.3% points higher than the 3.2% appreciation recorded in FY’2021/22. This week, we update our report by analysing the overall performance of the NMA land sector over time, exploring the various factors that impact its performance, with a focus on selling prices and annual capital appreciation, and a look at the investment opportunities. Then we shall have a general outlook for the sector. During FY’2023/2024, the NMA land sector continued to show resilience in performance with the average Year-on-Year (y/y) price appreciation coming in at 3.9% in FY’2023/24, 0.6% slower than the 4.5% appreciation recorded in FY’2022/23. The average asking prices came in at Kshs 132.7 mn in FY’2023/24 from Kshs 128.6 mn in FY’2022/23. The performance also represented a 13-year average price appreciation CAGR of 8.2%, with the average selling price for land coming in at Kshs 132.7 mn in FY’2023/24, from Kshs 47.9 mn in 2011. This underscores the sustained and growing demand for land in the region;

Click the link below to read the Cytonn Weekly report:https://t.co/CBOldxsOnq
Laptrust Earnings Note: https://t.co/CZX2GvAJ46
Equity Group Earnings Note: https://t.co/CZX2GvAJ46
Co-op Bank Earnings Note: https://t.co/1haHObh60O

[Cytonn Investments @CytonnInvest]

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In our Cytonn Report this week, we analyzed the performance of Kenya’s Equities, Fixed Income, and Real Estate markets for the week ended.

Click the link below to read the full Cytonn Weekly report: https://t.co/u4H6BH4qdF

[Cytonn Investments @CytonnInvest]

In our Cytonn Report this week, we analyzed the performance of Kenya’s Equities, Fixed Income, and Real Estate markets for the week ended, with a special focus on the Review of Kenya’s Public Debt Profile 2024. Below are the highlights.;

a) Fixed Income:
During the week, T-bills were oversubscribed, with the overall oversubscription rate coming in at 131.9%, a reversal from the undersubscription rate of 87.4% recorded the previous week. Investors’ preference for the shorter 91-day paper persisted, with the paper receiving bids worth Kshs 25.8 bn against the offered Kshs 4.0 bn, translating to an oversubscription rate of 645.3%, higher than the oversubscription rate of 272.1% recorded the previous week. The subscription rates for the 182-day and 364-day papers decreased to 41.5% and 16.9% respectively from the 72.6% and 28.4% respectively recorded the previous week. The government accepted a total of Kshs 22.9 bn worth of bids out of Kshs 31.6 bn bids received, translating to an acceptance rate of 72.5%. The yields on the government papers recorded a mixed performance, with the yields on the 364-day paper increasing by 2.4 bps to 16.92% from the 16.90% recorded the previous week, while the yields on the 182-day and 91-day papers decreased by 0.2 bps and 2.2 bps to 16.85% and 16.00% respectively from 16.85% and 16.02% respectively recorded the previous week;

In the primary bond market, the government is looking to raise Kshs. 50.0 bn through the reopened infrastructure bonds IFB1/2023/6.5 with a tenor to maturity of 5.8 years and IFB1/2023/17 with a tenor to maturity of 15.7 years. The bonds will be offered at fixed coupon rates of 17.9% and 14.4% for the IFB1/2023/6.5 and IFB1/2023/17 respectively. Given the current market conditions and the recent bond issues, we expect the average rate of accepted bids for the two bonds to come in at a range of 17.85%-17.95% for the IFB1/2023/6.5 and 14.45% - 14.85% for the IFB1/2023/17;

During the week, Cameroon announced the issuance of a USD 550.0 mn Eurobond with a tenor of 7 years at a coupon rate of 9.5% and a yield of 10.75%, becoming the fifth country in the Sub-Saharan Africa (SSA) region, following Ivory Coast, Benin, Senegal, and Kenya to tap into the international capital markets in 2024. The bond was undersubscribed, with the undersubscription rate coming in at 98.9%, receiving USD 550.0 mn (332.2 bn CFA Francs) of the CFA 336.0 bn offered initially. The issuance was conducted through a private placement, with Citigroup Global Markets Ltd serving as the sole placement agent and arranger alongside Cygnum Capital Middle East;

Also, we are projecting the y/y inflation rate for July 2024 to come in at the range of 4.7% - 5.0% mainly on the back of the weakening of the Kenya Shilling against the US Dollar having recorded a 2.4% month-to-date decline to Kshs 132.6 as of 26th July 2024 from the Kshs 129.5 recorded at the beginning of the month, a contrast to the 0.5% gain recorded last month and the 15.6% year-to-date gain from the Kshs 157.0 recorded at the beginning of the year;

b) Equities:
During the week, the equities market was on a downward trajectory, with NASI being the biggest decliner by 4.0% while NSE 10, NSE 25, and NSE 20 declined by 3.4%, 3.1%, and 1.6% respectively, taking the YTD performance to gains of 19.5%, 17.2%, 13.3%, and 11.0% for NSE 10, NSE 25, NASI, and NSE 20 respectively. The equities market performance was driven by losses recorded by large-cap stocks such as Safaricom, KCB, and Equity of 8.2%, 7.3%, and 3.4% respectively. The performance was, however, supported by gains recorded by large-cap stocks such as DTB-K and Bamburi of 0.8% and 0.4% respectively;

During the week, British American Tobacco Kenya Plc released their H1’2024 financial results, recording a 24.3% decline in Profits after Tax (PAT) to Kshs 2.1 bn, from Kshs 2.8 bn recorded in H1’2023. The decline in PAT was majorly attributed to the 6.5% decrease in Gross Sales to Kshs 19.6 bn in H1’2024 from Kshs 21.0 bn recorded in H1’2023;

c) Real Estate:
During the week, Faulu Microfinance Bank, a subsidiary of Old Mutual Group, announced a range of innovative financial solutions including unsecured loans, customized financial packages for property improvement, and payment plans aligned with rental income cycles aimed at addressing gaps in service access for landlords, agents, and other stakeholders in Real Estate development and management;

Additionally, Megna Homes, a Mombasa-based developer announced plans for the construction of a modern 816-unit gated community project in Kisauni. The project dubbed ‘Santana’ is set to be launched in August 2024 and is expected to be complete by the end of 2 years at Kwa Sonko in Bakarani along the Old Mombasa-Malindi Road;

On the Unquoted Securities Platform, Acorn D-REIT and I-REIT traded at Kshs 24.5 and Kshs 22.0 per unit, respectively, as per the last updated data on 26th July, 2024. The performance represented a 22.5% and 10.0% gain for the D-REIT and I-REIT, respectively, from the Kshs 20.0 inception price. Additionally, ILAM Fahari I-REIT traded at Kshs 11.0 per share as of 26th July, 2024, representing a 45.0% loss from the Kshs 20.0 inception price;

d) Focus of the Week:
Kenya is one of the fastest growing economies in Sub-Saharan Africa, having registered a growth rate of 5.0% in the first quarter of 2024. Despite being one of the fastest growing economies in Sub-Saharan Africa with a projected economic growth rate of 5.0%, above the region’s average of 3.7%, Kenya is grappling with a high debt burden, facing elevated risk of debt distress and significant challenges in managing its public debt, which has increased rapidly in recent years. As per the latest data from the Central Bank of Kenya (CBK), the total public debt stood at Kshs 10.6 tn as of June 2024, compared to Kshs 10.3 tn recorded in June 2023. Notably, external debt reduced by 5.2% during the period to Kshs 5.2 tn in March 2024, from 5.4 tn in June 2023 attributable to the early partial repayment of the USD 2.0 bn Eurobond in February 2024. Consequently, the debt to GDP ratio has increased to 70.0% as of June 2024, 20.0% points higher than the International Monetary Fund (IMF) threshold of 50.0% for developing countries, though slightly down from the 70.8% recorded in June 2023. The rising public debt has raised concerns about its sustainability and implications for fiscal and macroeconomic stability. These concerns have seen credit rating agencies such as Fitch, Moody’s, and S&P Global maintaining Kenya’s credit outlook at negative, resulting in higher borrowing costs in the international market. Notably, earlier this month, Moody’s downgraded Kenya’s credit score by one scale to Caa1, from B3 on the back of the country’s inability to implement its fiscal consolidation measures focused on revenue, which are necessary to reduce overall debt. Additionally, S&P Global has scheduled a review on 23rd August 2024 to decide on Kenya’s sovereign credit rating. The firm may either downgrade Kenya’s B credit score to B- or maintain the current rating but keep it on downgrade warning with a negative outlook. S&P Global is adopting a wait-and-see approach to gain more clarity on the appropriation bill, spending allocations, the final budget, and the finance bill. With the withdrawal of the planned tax increases, Kenya’s government faces the challenge of prolonged fiscal deficits, which could further deteriorate the government’s public debt situation and worsen the debt vulnerability of Kenya. Consequently, in this week’s topical, we shall focus on the current status of Kenya’s public debt as at the end of FY’2023/2024. We shall also give our outlook on the country’s debt sustainability;

Click the link below to read the Cytonn Weekly report: https://t.co/VBIN16AyYh
and https://t.co/r8QydRLm2L

[Cytonn Investments @CytonnInvest]

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In our Cytonn Report this week, we analyzed the performance of Kenya’s Equities, Fixed Income, and Real Estate markets for the week ended, with a special focus on the Kenya Retail Report 2024. Below are the highlights;

a) Fixed Income:
During the week, T-bills were undersubscribed for the first time in three weeks, with the overall undersubscription rate coming in at 87.4%, a reversal from the oversubscription rate of 137.3% recorded the previous week. The yields on the government papers were on an upward trajectory, with the yields on the 364-day, 182-day, and 91-day papers increasing by 1.8 bps, 3.0 bps, and 2.6 bps to 16.90%, 16.85%, and 16.02% respectively from 16.88%, 16.82% and 16.00% respectively recorded the previous week;

Also, during the week, the Central Bank of Kenya released the auction results for the re-opened bond FXD1/2024/010 with a tenor to maturity of 9.7 years, and a fixed coupon rate of 16.0% and FXD1/2008/020 with a tenor to maturity of 3.9 years, and a fixed coupon rate of 13.8%. The bonds were undersubscribed with the overall undersubscription rate coming in at 48.9%, receiving bids worth Kshs 14.7 bn against the offered Kshs 30.0 bn. The government accepted bids worth Kshs 9.8 bn, translating to an acceptance rate of 66.5%;

During the week, the Central Bank of Kenya (CBK) released the annual bank supervision report for FY’2023, highlighting that the banking sector registered a decrease in profitability during the year, with profit before tax decreasing by 8.8% to Kshs 219.2 bn in 2023 from the Kshs 240.4 bn recorded in 2022. The sector’s capital and reserves increased by 6.8% to Kshs 980.2 bn in 2023, from Kshs 917.6 bn in 2022;

During the week, the National Treasury gazetted the revenue and net expenditures for the twelfth and final month of FY’2023/2024, ending 30th June 2024, highlighting that the total revenue collected as at the end of June 2024 amounted to Kshs 2,293.0 bn, equivalent to 93.2% of the revised estimates of Kshs 2,461.0 bn for FY’2023/2024

b) Equities:
During the week, the equities market recorded a mixed performance, with NSE 20 gaining by 0.3% while NASI declined the most by 1.3%. NSE 25 and NSE 10 both declined by 0.8% respectively, taking the YTD performance to gains of 23.7%, 20.9%, 18.1%, and 12.8% for NSE 10, NSE 25, NASI, and NSE 20 respectively;

c) Real Estate:
During the week, the Central Bank of Kenya (CBK) released The Bank Supervision Annual Report 2023 which indicated that; in 2023, the number of mortgage accounts increased by 2,229, representing an 8.0 % increase to 30,015 from the 27,786 recorded in 2022. Additionally, the value of outstanding Non-Performing Mortgage Loans increased by 7.9% to Kshs 40.8 bn in 2023 from Kshs 37.8 bn in 2022;

On the Unquoted Securities Platform, Acorn D-REIT and I-REIT traded at Kshs 24.5 and Kshs 22.0 per unit, respectively, as per the last updated data on 19th July, 2024. The performance represented a 22.5% and 10.0% gain for the D-REIT and I-REIT, respectively, from the Kshs 20.0 inception price. Additionally, ILAM Fahari I-REIT traded at Kshs 11.0 0 per share as of 12th July, 2024, representing a 45.0% loss from the Kshs 20.0 inception price;

d) Focus of the Week:
This week, we update our Kenya Retail Report 2023 with the Kenya Retail Report 2024 themed “Resilient and Evolving Retail Landscape”, in which we discuss the progress and performance of the Kenyan retail sector. This will be based on research that was conducted on nine nodes within the Nairobi Metropolitan Area (NMA), in addition to other key urban cities in Kenya including Kisumu, Nakuru, Mombasa, Eldoret, and the Mount Kenya Region. Based on this, we shall identify the market performance in terms of rents, occupancy rates, and rental yields, while updating on the key factors in the market driving their performance. According to the report, the Kenyan retail sector displayed a stable overall performance, with the average rental yield coming in at 7.6% in 2024, 0.1% points increase from 7.5% recorded in 2023. The average occupancy rate increased by 1.6% points, reaching 81.0% in 2024 from 79.4% in 2023, mainly driven by the rapid expansion of both local and international retailers;

Click the link below to read the Cytonn Weekly report: https://t.co/awZ44cBkVH Topical: https://t.co/NTQggQn7sP

[Cytonn Real Estate @CytonnRE]

In our Cytonn Report this week, we analysed the performance of Kenya’s Equities, Fixed Income and the Real Estate markets for the week ended 12th July 2024 .

Click the link below to read the full Cytonn Weekly report: https://t.co/bgrsuoYtm2 , https://t.co/4114sGOhz3

[Edwin H. Dande @ehdande]

In our Cytonn Report this week, we analysed the performance of Kenya’s Equities, Fixed Income and the Real Estate markets for the week ended 12th July 2024 as well as a report on Special Interest Group Funds in Kenya. Below are the highlights;

a) Fixed Income:
During the week, T-bills were oversubscribed for the second consecutive week, with the overall oversubscription rate coming in at 137.3%, higher than the oversubscription rate of 124.4% recorded the previous week. Investors’ preference for the shorter 91-day paper persisted, with the paper receiving bids worth Kshs 14.6 bn against the offered Kshs 4.0 bn, translating to an oversubscription rate of 364.7%, albeit lower than the oversubscription rate of 370.1% recorded the previous week. The subscription rates for the 182-day and 364-day papers increased to 100.6% and 83.0% respectively from the 94.2% and 56.3% respectively recorded the previous week. The government accepted a total of Kshs 30.2 bn worth of bids out of Kshs 32.9 bn bids received, translating to an acceptance rate of 91.8%. The yields on the government papers were on an upward trajectory, with the yields on the 364-day, 182-day, and 91-day papers increasing by 5.0 bps, 2.7 bps, and 0.9 bps to 16.88%, 16.82%, and 16.00% respectively from 16.83%, 16.80% and 15.99% respectively recorded the previous week;

During the week, the global ratings agency, Moody’s announced its revision of Kenya’s credit score, downgrading it by one scale to Caa1 from a credit rating of B3 while maintaining a negative outlook, on the back of the government's decision to forgo proposed tax increases through the Finance Bill 2024 and rely on expenditure cuts, significantly impacting Kenya's fiscal trajectory and financing needs;

During the week, the Kenya Revenue Authority (KRA) released the annual revenue performance for FY’2023/24, highlighting that revenue mobilization for the period grew by a notable 11.1% up from 6.4 % growth in the previous financial year, after KRA collected Kshs 2.4 tn compared to Kshs 2.2 tn in the previous financial year. This translates to a performance rate of 95.5% against the target;

b) Equities:
During the week, the equities market was on an upward trajectory, with NSE 20 gaining the most by 2.2% while NSE 10, NSE 25, and NASI gained by 1.9%, 1.9%, and 0.9% respectively, taking the YTD performance to gains of 24.6%, 21.9%, 19.6% and 12.4% for NSE 10, NSE 25, NASI and NSE 20 respectively. The equities market performance was driven by gains recorded by large-cap stocks such as Bamburi, KCB Group, and EABL of 37.9%, 6.7%, and 4.7% respectively. The performance was, however, weighed down by losses recorded by large-cap stocks such as Safaricom and ABSA bank of 1.4%, and 1.1% respectively;

Also, during the week, Amsons Industries (K) Limited of Tanzania announced its intention to acquire 100% of the ordinary shares of Bamburi Cement Plc with a par value of Kshs 5.0 each for a cash consideration. The offer value of Kshs 23.6 bn translates to a purchase price of Kshs 65.0 per share, which is 42.4% above the price of 45.7 as at one month ago. This offer has been made in accordance to the Capital Markets (Take-overs & Mergers) Regulations, 2002. This acquisition, if successful, will make Amsons Industries (K) Limited the sole owner of Bamburi Cement Plc;

c) Real Estate:
During the week, Finsco Africa, a Real Estate firm, announced that it recently secured a Kshs 5.0 bn deal with Atlanta-based Go Greenwood Bank LLC for onward long-term funding with a key focus on affordable housing targeting the lower and upper middle class.

During the week, TPS Eastern Africa, the owner of Serena hospitality brand, announced its plan to build a multi-purpose conference facility next to its Nairobi Serena Hotel. The facility, estimated to cost up to USD 30.0 mn (Kshs 3.9 bn), targets the meetings, conferences, and exhibitions market.

In the Regulated Real Estate Funds sector, under the Real Estate Investment Trusts (REITs) segment, ICEA Lion Asset Managers (ILAM) Fahari I-REIT was admitted to the Unquoted Securities Platform (USP) of the Nairobi Securities Exchange (NSE), following their delisting from the main investment market in February 2024. ILAM Fahari joined Acorn I-REIT, Acorn D-REIT, and the Linzi Sukuk in the USP, marking the first trading day in the segment;

On the Unquoted Securities Platform, Acorn D-REIT and I-REIT traded at Kshs 24.5 and Kshs 22.0 per unit, respectively, as per the last updated data on 12th July, 2024. The performance represented a 22.5% and 10.0% gain for the D-REIT and I-REIT, respectively, from the Kshs 20.0 inception price. Additionally, ILAM Fahari I-REIT traded at Kshs 11.0 per share as of 12th July, 2024, representing a 45.0% loss from the Kshs 20.0 inception price;

d) Focus of the Week:
Special interest group funds in Kenya, such as the Financial Inclusion Fund (Hustler Fund) and the Youth Enterprise Development Fund (YEDF), aim to promote financial inclusivity and support economic growth by providing accessible credit to marginalized communities. However, recent audits reveal significant issues with these funds, casting doubts on their transparency, accountability, and overall effectiveness. The Hustler Fund, for instance, faced scrutiny for its management and loan recovery processes, with inconsistencies in financial statements and systemic deficiencies in its loan management system. Similarly, the Youth Enterprise Fund has struggled with high default rates, unserviced loans, and questionable financial transactions, leading to concerns over its sustainability and operational integrity. These challenges highlight the critical need for robust oversight and improved governance to ensure these funds fulfill their intended purpose of empowering underserved populations and fostering economic development. This topical will delve into the various special funds examining the structures, operational sustainability, performance and offering insights into potential reforms for more effective management of special interest group funds in Kenya.

Click the link below to read the Cytonn Weekly report: https://t.co/eFx4bja9De , https://t.co/Sqjkf1378v

[Cytonn Real Estate @CytonnRE]

We are on!

[Edwin H. Dande @ehdande]

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