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Cytonn Investments Releases Annual Business & Market Outlook for 2017

January 9, 2017

Cytonn Investments today released the 2017 Business & Market Outlook Report, which focused on providing investors with Cytonn’s analysis of the investment environment in 2017. The outlook was in line of taking a view on the market so as to make recommendations on where best to invest this year.

The team behind the report: L-R Maurice Oduor, Investments Manager; Johnson Denge, Market Research & Site Acquisition Manager; Shiv Arora, Head of Private Equity, Real Estate

The report, which was released at the Sarova Stanley Hotel, Nairobi, projected Kenya’s 2017 GDP growth to be between 5.4% - 5.7%, supported by government expenditure on infrastructure, recovery of the tourism sector and the continued growth of the construction sector. “On other macroeconomic factors, we expect higher inflation in 2017 averaging between 6.7% and 7.2% driven by: (i) prolonged dry weather, which will persist until mid-2017 driving food prices up, (ii) higher oil prices, (iii) depreciation of the currency, and (iv) increased money supply due to the campaign money,’’ said Maurice Oduor, Investment Manager during the release. “We thus recommended investors to be biased towards short-term fixed income instruments,’’ added Maurice.  

“We maintain a “Neutral” recommendation on equities for investors with short-term investment horizon since, despite the lower earnings growth prospects for this year, the market decline so far has made valuations attractive,” said Caleb Mugendi, Investments Analyst at Cytonn Investments. The low valuation, especially in sectors such as financial services, where the market is currently trading at a price to book of 0.9x for banking stocks versus a 10-year historical average of 2.1x,” he added - http://bit.ly/2jtAB3R

Caleb Mugendi, Investments Analyst releasing the Business & Market Outlook 2017 Report

The report, which is part of the informative industry reports regularly released by Cytonn Investments, also pointed out that investments in real estate are still attractive. Despite a few constraints, the (i) growth of businesses, (ii) increased infrastructural development, and (iii) improved operating and legal environment are expected to drive real estate investments in 2017. Johnson Denge, Cytonn’s Market Research & Site Acquisition Manager while releasing the report noted, “There exists a huge opportunity for investors in the real estate sector; especially in the residential, retail, industrial and hospitality sectors. Investors will however have to be cautious in their investments ensuring that proper research and due diligence is done before investing and matching the right products to the right market in order to boost uptake,” added Johnson.