Finance

Inflation in Kenya fell to 3.6% in September from 4.4% in August 2024, preserving the real purchasing power of money. This reduction in inflation allows the Central Bank of Kenya (CBK) to lower interest rates without causing inflationary pressures, making borrowing cheaper and encouraging investment and consumption, which supports economic growth.

The re-opened bonds, IFB1/2023/017 and IFB1/2023/6.5, with fixed coupon rates of 14.4% and 17.9%, respectively, attracted bids totaling KES 126.3 billion, significantly exceeding the target, resulting in an oversubscription rate of 252.6%.

Special Funds are unique in that they are given leeway to develop their asset allocation but with CMA guidance and oversight. Unlike traditional funds, which often adhere to rigid asset allocation models, Special Funds can craft and adjust their portfolios according to their unique investment objectives and market conditions.

Global markets in June 2024: S&P 500 and Nasdaq hit new records in the US, European markets mixed ahead of elections, the European Central Bank (ECB) and Swiss National Bank cut rates, while Asian markets showed varied performance with China’s Yuan weakening and Japan’s Nikkei 225 rising.

The CMA approved new sub-funds within existing unit trust schemes, including the Old Mutual Special Fixed Income Fund, NCBA Global Equity Special Fund, NCBA Global Fixed Income Special Fund, KCB Wealth Fund (Special Fund), Jubilee Money Market Fund (USD), and Jubilee Enhanced Fixed-Income Special Fund.

In March, the Kenyan shilling has experienced a consistent uptrend, appreciating by 16 percent against the US dollar since the beginning of 2024. This surge in value comes on the heels of the issuance of a $1.5 billion (Sh198.0 billion) Eurobond. The proceeds from this issuance were utilized to partially repurchase the June 2024 $2 billion (Sh264.1 billion) maturity, along with funding the significant oversubscription of the inaugural infrastructure bond issued earlier this year.

KenGen commissioned a feasibility study on generating power from geothermal brine, potentially increasing its renewable energy capacity, which could positively impact its revenues and expansion plans. KenGen reported a 9.2% y/y decline in net profit, despite a growth in top line, attributed to higher operating expenses impacted by currency depreciation.

In January, the government unveiled an amortized infrastructure bond, IFB1/2024/8.5, with an 8.5-year duration set to be auctioned from 24/01/2024 to 14/02/2024.