February 2024 Market Wrap-up Report


Throughout February, there was a persistent uptrend in money market fund rates, as evidenced by the average daily effective rate reaching 13.37% per annum, up from January’s average of 13% per annum. This escalation was primarily fueled by the increasing interest rates on government securities, a pivotal asset class for money market funds.

In terms of individual performance, Etica Money Market Fund led the pack with an impressive average daily yield of 15.95% per annum, followed closely by the Lofty Corban, Cytonn, Apollo, and GenAfrica Money Market Funds, showcasing daily average effective rates of 15.79%, 15.21%, 15.18%, and 14.72% per annum, respectively.

Daily Average Yields for MMFs in February

To note, to get the true rate of a money market fund, remove the withholding tax of 15% from the announced yield. Some funds, though, report net return after the withholding tax.

Dollar Money Market Fund Returns

In February, Lofty USD Money Market claimed the top spot with an average return of 6.25%, trailed by Cytonn, Kuza, and Old Mutual with average returns of 6.20%, 6.04%, and 5.74%, p.a., respectively.

Investing in USD Money Market Funds is a prudent strategy to safeguard the value of your USD currency, especially considering the potential for a stronger dollar against the shilling in the future.

Fixed Income Funds

Lofty Corban Special Money Market Fund, operating as a fixed-income fund, secured the leading position with an impressive average return of 16.20%. Madison, Nabo, Zimele, and Kuza Fixed Income Funds followed closely, posting average daily effective returns of 14.33%, 14.32%, 13.09%, and 13.03%, respectively.


In February, the government released the first infrastructure bond of 2024, but the second within the Fiscal Year 2023/24. The bond, labeled as IFB1/2024/8.5, closed at a coupon rate of 18.46%.

The redemption will occur in three phases: the initial 20% tranche in February 2027, followed by a 30% tranche in February 2030, and the remaining 50% upon expiry in August 2032. Notably, the bond was oversubscribed with bids totaling Kshs 288.7 billion against an offered amount of Kshs 70.0 billion, resulting in an oversubscription rate of 412.4%. Consequently, the government accepted bids totaling Kshs 241.0 billion, representing an acceptance rate of 83.5%.

The T-bills auction witnessed an oversubscription, with an overall average oversubscription rate of 150.4%, against the January 2024 figure of 133.7%. The heightened demand suggests continued investor interest in short-term government securities, potentially influenced by prevailing market conditions or investor sentiments.

The NSE received approval to operationalize a hybrid fixed-income market, combining both onscreen and over-the-counter (OTC) trading, which is expected to improve pre-trade transparency.

The Central Bank of Kenya Monetary Policy Committee (MPC) raised the Central Bank Rate (CBR) by 50 basis points to 13.0%, aiming to stabilize FX rates and anchor inflationary pressures.

The Government of Kenya issued a new Eurobond worth USD 1.5 billion, which attracted a yield of 10.375% and a coupon rate of 9.75%.


In February, the Kenyan stock market experienced an upward trend, witnessing notable increases in major indexes such as NSE 25, NSE 20, and NASI, which gained 2.7%, 1.8%, and 0.3%, respectively.

This positive performance in the equities market was predominantly fueled by gains seen in stocks like Co-operative Bank, Absa, and Equity, which recorded rises of 7.4%, 9.8%, and 6.6%, respectively. However, these gains were offset by losses incurred in other significant stocks such as Safaricom, BAT, and Stanbic, which experienced declines of 2.6%, 2.4%, and 1.6%, respectively.

Foreign investors exhibited a bearish sentiment towards key blue-chip stocks, resulting in a net outflow of USD 6.2 million for the month. The total equity turnover for the month stood at USD 30.6 million, with Safaricom emerging as the most traded counter, accounting for 31% of the overall market activity.

Short-term prospects for the stock market appear uncertain due to the challenging environment and the selling off of assets by foreign investors. However, there is optimism in the long term, driven by low valuations and the potential for both global and local economic recovery.

Additionally, in other news:

  • 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. The board did not recommend an interim dividend.
  • BAT Kenya reported a 19.4% y/y decline in profit after tax, attributed to a shrinking topline and geopolitical factors affecting the domestic market.
  • Safaricom announced an interim dividend of KES 0.55 per share for the Financial Year 2023/2024, payable to shareholders on the register of members as of the book closure date of March 15, 2024.


In the US, all major indices had a positive February. The Nasdaq and S&P 500 performed the best, up 4.14% and 3.99%, respectively, with the Nasdaq hitting a new all-time high. The Dow Jones had a more modest gain of just under 1%.

These gains were driven by strong performances in the technology sector, particularly companies like Nvidia, which surged more than 18% after reporting strong earnings. Investor optimism about the future of Artificial Intelligence (AI) also contributed.

The Japanese yen and Australian dollar both weakened by close to 5% against the US dollar. Other major currencies also declined, albeit to a lesser extent, with the UK pound showing more resilience.

Interest rate differences between countries played a significant role in short-term currency movements. For example, the UK saw a rise in its 2-year interest rates relative to the US, making the pound more attractive in the short term. Conversely, Australia experienced a decline in its interest rate differentials.


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