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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
Real GDP expanded by 5.0 per cent in 1Q24 compared to 5.3% in 1Q23 (vs 5.5% in 4Q23). The positive growth was primarily notable in the
Agriculture sector +6.1%y/y on increased tea, milk, sugarcane production, though weighed by lower coffee and flower exports. Notable growth was also noted in real estate +6.6%y/y, financial and insurance services +7.0%y/y, ICT +7.8%y/y, accommodation and food services +28.0%y/y.
Inflation
Inflation decelerated, hitting a near 4-year low, due to slower growth in food and fuel prices. June inflation print came in at 4.6% compared to a restated 5.0% in May. 1H24 inflation averaged 5.6% vs 8.5% in 1H23. We anticipate the annual inflation rate to oscillate within the mid-point (5.0%) of CBK’s target range supported by the declining food and fuel inflation.
Equities
The bourse pared down 3.1% in June 2024, though closed the first half of 2024 in the green, +18.9% vs –16.1% in 1H23. Similarly, the N10, NSE 20 and NSE 25 gained 23.1%, 10.3% and 20.2% respectively. The fund will continue to ensure steady returns while taking moderate risk.
Exchange Rates
Interest Rates
Relative price stability combined with fairly decent economic growth prospects prompted the MPC to retain the Central bank rate at 13%. The increase in short-term papers has been somewhat moderate, with the 91, 182 and 365 day papers closing the first half of the 2024 at 15.98%, 16.76% and 16.79% 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
