At CIC we are committed to maintaining open and transparent communication with our shareholders and investors in order to nurture a strong relationship with them.
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. The slowdown was seen across all economic sectors except manufacturing, wholesale and retail trade, health and professional services. The agriculture sector grew by 4.8% compared to 7.8% in Q2 2023. The services sector recorded a growth of 5.5% compared to 6.8% and contributed 3.1% to real GDP.
Inflation
Headline inflation rose for the first time in seven months, albeit marginally, to 4.4% in August from 4.3% in July 2024. The rise is largely attributable to higher fuel prices while food inflation decelerated m/m. We reiterate that we expect the annual inflation rate to oscillate within the mid-point (5.0%) of CBK’s target range supported by favourable weather.
Equities
The NSE-20 and NASI declined by 4.2% and 11% respectively led by sell off in blue-chip counters such as KCB Bank, Equity Bank and Safaricom. Overall, investor risk appetite remains muted due to the tough macroeconomic environment and high interest rates in the money markets.
Exchange Rates
Interest Rates
In early October, the Monetary Policy Committee voted to lower the policy rate to 12% from 12.75%, noting that its previous measures have lowered overall inflation to below the mid-point of the target range, stabilized the exchange rate; noting that there is scope further reductions in the coming months. The short term papers finished the quarter at 15.71%, 16.758% and 16.79% 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
