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Interview

Carole Kariuki, CEO, Kenya Private Sector Alliance: Interview
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Interview:Carole Kariuki, CEO How is business optimism in Kenya evolving? CAROLE KARIUKI: Increased business activity stemming from greater investor confidence is pegged to a surge in private sector output and employment. According to CfC Stanbic Bank’s Purchasing Managers’ Index, business activity is up from a low of 34.4 points in October 2017 to 57.7 as of April 2018. This renewed confidence…
Analysis

The East African Community works to establish political and monetary federations

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As the founding member of both the EAC and COMESA, two economic blocs accounting for approximately 145m and 400m people, respectively, Kenya has historically played an important role in politics and integration efforts in the region. As part of the African, Caribbean, and Pacific Group of States (ACP), exports from Kenya benefit from a range of duty reductions when entering the European market. In…

Analysis

Benchmarking equities in Kenya and the region

Posted OBG AdminPosted in Uncategorized

Election years are perceived by many as disruptive of day-to-day life, and 2017 was no exception for Kenya, which experienced an impact on the equity market and the economy at large in light of its vote that year. Nonetheless, despite election jitters, the Nairobi Securities Exchange (NSE) All Share Index hit 24.5% in 2017. The NSE 20 and the NSE 25 also closed the year at levels that were commendable…

Analysis

Kenya's fixed-income securities market

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Fixed income was billed as an attractive asset class in the capped-interest-rate era. This seems to be borne out by the fact that commercial banks increased their holdings of domestic debt by the equivalent of 2.23% of GDP in 2017, intensifying their grip on safer asset classes in lieu of riskier credit lending. Commercial banks accounted for 49.17%, or KSh947.8bn ($9.3bn), of domestic debt at end-2016;…
Analysis

Kenyan capital market sees strong early uptake of exchange-traded funds

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For many years Kenya’s interaction with the global exchange-traded fund (ETF) arena was a passive one. The nation’s reputation as a lively frontier market meant that it was frequently a component of foreign-based ETFs which targeted global investors with an interest in the potentially higher returns of emerging markets. For instance, in the US, the PowerShares Frontier Markets Portfolio, VanEck…

Analysis

Real estate investment trusts in Kenya

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The STANLIB Fahari I-REIT (FAHR) is the only listed REIT on the Nairobi Securities Exchange (NSE). FAHR is an income REIT (I-REIT), which is a type of REIT that owns and manages income-generating real estate for the benefit of its shareholders. I-REITs are required to distribute at least 80% of their income as dividends. With the listing of FAHR, Kenya became the fourth African country to have a listed…
Analysis

Public policy and private investment target Kenyan manufacturing

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Released by the Treasury in June 2018, the 2018/19 budget policy statement (BPS) outlined plans to increase state support for the manufacturing segment’s development, while also setting targets for growth and employment across a range of industrial segments. Objectives include increasing manufacturing’s contribution to GDP from 8.4% in 2017 to 15% by 2022, adding approximately $3bn to the economy…
Analysis

The development of geothermal assets is up for debate in Kenya

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A new Energy Bill – which completed its public consultation phase in February 2018 – may result in a significant shake-up of Kenya’s geothermal segment. Significantly, the draft legislation lays out a royalties schedule. The raft of laws has been passed by the National Assembly but was still awaiting Senate approval as of September 2018. The bill will see geothermal firms pay fees of between…
Analysis

New mining law in Kenya provides clarity to investors and aligns the country with international standards

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Kenya’s first mining laws were promulgated in 1940. The Unwrought Mineral Act and the Diamond Industry Protection Act served as the legislative backbone of the industry for more than 70 years, during which the sector seldom accounted for more than 1% of the nation’s GDP. The slow growth of Kenya’s mining industry was in contrast to its East African neighbours Uganda and Tanzania, both of which…
Analysis

Mobile options increase access to insurance in Kenya

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As Kenya’s insurers respond to increasing competition by seeking new routes to premium, technology is playing a markedly important role in the market. In 2016 the Association of Kenya Insurers (AKI) remarked upon the rising popularity of so-called insurtech solutions, noting in its annual report that digitalisation is reducing customer friction points, and insurers are increasingly investing in digital…