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Market Commentary
Key Features
Fund Manager | CIC Asset Management Ltd |
Launch Date | May - 18 |
Risk Profile | Low - Moderate |
Trustee | Kenya Commercial Bank |
Custodian | Co-op Custodial Services |
Auditors | Kirenge & Associates |
Fund Objective
The fund provides a solution to organizations that find setting up a Retirement Fund and continuously comply-ing with the complex legal and statutory demands a challenge in both monetary and human resource cost.
SMEs and start-up organizations.
Fund Outlook
Global risks continue negatively affecting our stock market, and coupled with the interest rate hikes in de-veloped economies, foreign exits have sustained. The low prices in the market continue to provide attrac-tive price points into stocks with strong fundamentals and perpetual dividend payout thus locking in good yields.The government continues relying on the domestic debt market to meets is deficit owing to expensive external debt financing. Rates on government securities are hence expected to continue increasing in the near term.The fund will continue being affected by the downturn in the stock market but the bond performance will support stable performance.The fund will continue being affected by the downturn in the stock market but the bond performance will support stable performance.
Asset Allocation
GDP
GDP growth slowed to 4.6% in Q2 2024, down from 5.6% recorded in Q2 2023. This slowdown mainly reflected deceleration in growth in most sectors of the economy. Some sub-sectors in industry contracted, underscoring the challenges to growth stemming from low government spending and consumer demand as well as sticky input prices. Overall, the economic growth outturn for 2024 is thus far slower than earlier projected and we see GDP growth could remain weak to end-year.
Inflation
Overall inflation recorded a marginal increase to 2.8% in November from 2.7% in October 2024; general prices rose by 0.3%. The lower inflation levels thus far provide sufficient room for further monetary policy easing ;as the focus is now slowly shifting from price stability to stimulation of aggregate demand.
Equities
In the month of November, the market indices closed in the red, with the NASI, NSE 20 and NSE 25 retracting by 5.17%,2.32% and 3.99% to close at 91.93, 1495.58 and 2377.88 respectively with market capitalization at KES 1436.268Bn. The bourse saw Safaricom Limited record a turnover of KES 2.54Bn, representing 37.9% of the month’s total turnover. Foreign investors remained bearish during the month recording net outflows worth KES 479,691,646.
Exchange Rates
Interest Rates
In the first week of December, the Monetary Policy Committee voted to lower the policy rate from 12% to11.25%, noting that its previous measures have maintained exchange rate stability and anchored inflation. It urged banks to take the necessary steps to lower their lending rates in order to stimulate credit to the private sector and subsequently economic activity. The short term papers closed the quarter at 11.25%, 11.34% and 12.49% for the 91, 182 and 365 day papers respectively.
Fund Performance
Statutory Disclaimer: The value of units may go down as well as up and past performance is not necessarily a guide to the future. There are no guarantee on the client’s capital as the performance of units in the fund is determined by change in the value of underlying investments hence value of your unit trust investment
