In our Cytonn Report this week, we analysed the performance of Global and Sub-Saharan African Region
Markets, Kenya’s Macroeconomic review as well as Kenya’s Equities, Fixed Income and the Real Estate
markets for H1’2025. Below are the highlights;
a) Global Markets Review
According to the World Bank the global economy is projected to grow at 2.3% in 2025, lower than the
2.7% growth recorded in 2024. This forecast marks a slight downward revision from earlier projection in
January of 2.7%, reflecting anticipated economic slowdown, particularly due to rising international trade
disputes and policy uncertainties. The World Bank’s growth projection is 0.5% points lower than the IMF’s
2025 forecast of 2.8%, which was also revised from the January 2025 projection of 3.3%. Both the World
Bank and the IMF revised their global growth forecasts downward due to weakening global trade, largely
driven by rising U.S. tariffs and the resulting trade tensions, which disrupted global supply chains and
slowed cross-border economic activity. Notably, advanced economies are expected to record a 1.2%
growth in 2025, up from the 1.7% expansion recorded in 2024. However, emerging markets and
developing economies are projected to expand by 3.8% in 2025, down from the 4.2% expansion recorded
in 2024;
b) Sub-Saharan Africa Regional Review
According to the World Bank, the Sub-Saharan economy is projected to grow at a moderate rate of 3.7%
in 2025, which is 0.2% points higher than the 3.5% growth recorded in 2024, and a downward revision
from the January 2025 projection of 4.1%. The downward revision is mainly due to the rising trade
barriers coupled with the weakened global investor confidence. The expected recovery from 2024 is
primarily driven by global economic stability, and easing of monetary policy rates in the region, which is
expected to boost private consumption and investment. However, most countries face the risk of
increased inflation due to increased food prices resulting from drought, prompting them to increase or
hold off on further easing of the rates. Nevertheless, the risk of debt distress remains high with more
than half of countries facing unsustainable debt burdens. The public debt is expected to remain high due
to increased debt servicing costs as a result of high interest rates in developed economies and a
reduction in donor support;
In H1’2025, most of the select Sub-Saharan currencies appreciated against the US Dollar, primarily due to
the respective central bank efforts, increased foreign currency inflows and debt-restructuring and policy
reforms which have improved forex reserves. Notably, the Ghanaian Cedi emerged as the best performer
among the selected currencies, appreciating by 29.9% against the USD on a year-to-date basis, closing
H1'2025 at GHS 10.3, from GHS 14.7 at the beginning of the year. The Ghanaian Cedi’s performance is
majorly attributable to tight monetary policy and stronger remittance flows;
c) Kenya Macroeconomic Review
According to the Kenya National Bureau of Statistics (KNBS) Q1'2025 Quarterly GDP Report, the Kenyan
economy recorded a 4.9% growth in Q1’2025, unchanged from the growth rate recorded in Q1’2024. The
main contributor to Kenyan GDP remains to be the Agriculture, fishing and forestry sector which grew by
6.0% in Q1’2025, higher than the 5.6% expansion recorded in Q1’2024. All sectors in Q1’2025 recorded
positive growths, with varying magnitudes across activities. Most sectors recorded contraction in growth
rates compared to Q1’2024 with Accommodation & Food Services, Financial Services Indirectly Measured
and Professional Administration recording growth rate declines of 34.0%, 13.4% and 4.8% points to 4.1%,
9.0% and 4.6% from 38.1%, 15.4% and 9.4% respectively. Other sectors recorded an expansion in growth
rates, from what was recorded in Q1’2024, with Mining and Quarrying, Taxes on products and
Construction recording the highest growths in rates of 26.0%, 2.8% and 2.6% points, to 10.0%, 5.7% and
0.4% from (16.1%), 2.9% and 3.0% respectively. Notably, the overall economic performance highlighted a
slight slowdown in momentum following tough operating environment characterized by the high costs of
living, and the lower private sector credit growth;
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d) Fixed Income
During H1’2025, T-bills were oversubscribed, with the overall subscription rate coming in at 154.5%, up
from 132.6% in H1’2024. Investors’ preference for the 91-day paper persisted with the paper receiving
bids worth Kshs 233.7 bn against the offered Kshs 104.0 bn, translating to an oversubscription rate of
224.8%, albeit lower than the oversubscription rate of 404.4% recorded in H1’2024. Overall subscription
rates for the 364-day and 182-day papers came in at 191.6% and 89.3% respectively, higher than the
80.7% and 75.7%, respectively, recorded in H1’2024. The average yields on the 364-day, 182-day, and 91-
day papers decreased by 6.2% points, 7.5% points, and 7.4% points to 10.4%, 9.1%, and 8.8% in H1’2025,
respectively, from 16.7%, 16.6%, and 16.2%, respectively, in H1’2024. The downward trajectory in yields
is primarily driven by improved investor confidence, stemming from reduced credit risk in the country
and eased inflationary pressures. This has lowered the risk premium demanded by investors. Despite the
government's sustained domestic borrowing, strong demand for government securities has supported
the decline in yields. During the period, the acceptance rate stood at 85.4%, down from 92.3% in
H1’2024, with the government accepting Kshs 823.2 billion out of the Kshs 964.0 billion worth of bids
received;
During the week, T-bills were undersubscribed for the second consecutive week, with the overall
subscription rate coming in at 90.9%, higher than the subscription rate of 60.4% recorded the previous
week. Investors’ preference for the shorter 91-day paper waned, with the paper receiving bids worth
Kshs 2.7 bn against the offered Kshs 4.0 bn, translating to a subscription rate of 67.4%, higher than the
subscription rate of 36.2%, recorded the previous week. The subscription rates for the 182-day paper
increased to 111.7% from the 12.0% recorded the previous week, while the 364-day paper decreased to
79.6% from the 118.4% recorded the previous week. The government accepted a total of Kshs 21.77 bn
worth of bids out of Kshs 21.83 bn bids received, translating to an acceptance rate of 99.7%. The yields
on the government papers registered a mixed performance with the yields on the 91-day paper
increasing by 0.7 bps to 8.15% from the 8.14% recorded the previous week, while the yields on the 182-
day and 364-day papers decreased by 1.1 bps and 0.9 bps to 8.45% and 9.71%, from the 8.46% and 9.72%
respectively recorded the previous week;
During the week, the Kenya National Bureau of Statistics released the Q1’2025 Quarterly Balance of
Payment Report, highlighting that Kenya’s balance of payments position deteriorated significantly by
313.8% in Q1’2025, with a deficit of Kshs 77.0 bn, from a surplus of Kshs 36.0 bn in Q1’2024. For a more
detailed analysis read our Q1’2025 Balance of Payments Note;
During the week, the Kenya National Bureau of Statistics (KNBS) released the Q1’2025 Quarterly Gross
Domestic Product Report, highlighting that the Kenyan economy recorded a 4.9% growth in Q1’2025,
remaining unchanged from Q1’2024. The main contributor to Kenyan GDP remains to be the Agriculture,
fishing and forestry sector which grew by 6.0% in Q1’2025, higher than the 5.6% expansion recorded in
Q1’2024. For a more detailed analysis read our Q1’2025 GDP note;
During the week, Linzi FinCo 003 Trust announced the successful full subscription of its Kshs. 44.8 bn
Infrastructure Asset-Backed Securities (IABS) issuance, with bids totaling KSh. 44.9 billion translating to a
subscription rate of 100.2%. The 15-year notes, offering a fixed annual return of 15.04%, will finance the
Talanta Sports Complex through receivables from the Sports, Arts and Social Development Fund (SASDF).
e) Equities
During Q2’2025, the equities market was on an upward trajectory, with NASI, NSE 10, NSE 25, and NSE 20
gaining by 17.3%, 13.0%, 11.5%, and 9.6%, respectively, taking the H1’2025 performance to gains of
22.4%, 18.5%, 14.3% and 13.9% for NASI, NSE 20, NSE 10, and NSE 25 respectively. The equities market
performance during the quarter was driven by gains recorded by large caps such as Safaricom, NCBA, and
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Cooperative Bank of 36.6%, 13.3%, and 11.9% respectively. The gains were however weighed down by
losses recorded by large cap stocks such as Bamburi and BAT of 4.4% and 2.8% respectively;
During Q2’2025, in the regional equities market, the East African Exchanges 20 (EAE 20) share index
declined by 11.0 bps, attributable to decline recorded by large cap stocks such as Airtel Uganda, MTN
Rwandacell and Tanzania Breweries of 13.6%, 9.1% and 2.8% respectively. The performance was however
supported by gains recorded by large cap stocks such as Bank of Baroda Uganda, Safaricom and KCB
Group of 1,317.9%, 42.1% and 22.1% respectively;
During the week, the equities market was on an upward trajectory, with NASI, NSE 25, NSE 10 and NSE 20
gaining by 5.7%, 5.1%, 4.8%, and 4.5%, respectively, taking the YTD performance to gains of 28.6%,
21.6%, 19.0% and 18.8% for NASI, NSE 20, NSE10, and NSE 25 respectively. The equities market
performance was mainly driven by gains recorded by large-cap stocks such as Stanbic Bank, Safaricom,
and NCBA of 9.9%, 8.0%, and 6.8%, respectively. The gains were however weighed down by losses
recorded by large cap stocks such as Cooperative Bank of 0.3%;
Additionally, in the regional equities market, the East African Exchanges 20 (EAE 20) share index
ddeclined by 54.6 bps, attributable to losses recorded by large cap stocks such as Tanga Cement,
Cooperative Bank and Tanzania cigarette of 33.4%, 1.6% and 1.4% respectively. The performance was
however supported by gains recorded by large cap stocks such as Safaricom, Bank of Baroda Uganda and
Absa of 6.1%, 4.4% and 3.5% respectively;
During the week,the Nairobi Securities Exchange (NSE) announced the inclusion of Sasini Plc as a
constituent in the NSE 25 Share Index to replace TransCentury Plc following the court order placing it
under receivership and subsequent suspension of trading of TransCentury Plc and its subsidiary East
Africa Cables;
f) Real Estate
In Q1’2025, the general Real Estate sector continued to witness considerable growth in activity in terms of
property transactions and development activities. Consequently, the sector’s activity contribution to
Gross Domestic Product (GDP) grew by 5.3 % to Kshs 358.4 bn in Q1’2025, from Kshs 334.1 bn recorded
during the same period in 2024. In Q1’2025, the sector contributed 10.2% to the country’s GDP,
remaining unchanged from Q1’2024. Cumulatively, the Real Estate and construction sectors contributed
15.5% to GDP in Q1’2025, 0.1% points decrease from 15.6% in Q1’2024, attributable to decline in
construction contribution to GDP by 0.1% points, to 5.2% in Q1’2025, from 5.3% recorded in Q1’2024;
During the week, the Kenya National Bureau of Statistics (KNBS) released the Q1'2025 Quarterly Gross
Domestic Product Report that outlined the performance of various sectors to the GDP, with real estate
sector contributing 10.2% of GDP;
During the week, the National carrier, Kenya Airways inked a code-sharing pact with Qatar Airways,
allowing the latter to introduce a third daily frequency between Doha and Nairobi while Kenya Airways
will launch Qatar Airways-marketed flights between Mombasa and Doha during the coming winter
season. This agreement makes Qatar Airways the 15 th codeshare partner of the local carrier in a growing
list that has seen Kenya Airways widen its global route network;
During the week, Kenya’s capital, Nairobi, was named Africa’s Leading Business Travel Destination 2025
at the 32 nd World Travel Awards. This marks Nairobi’s seventh consecutive win in the category,
maintaining its dominant position since first clinching the title in 2019. Nairobi was nominated in the
category alongside Accra, Cairo, Cape Town and Lagos;
During the week, lifestyle hotel group, African Hotel Development, entered a management agreement
with Aleph Hospitality for 26 ONOMO branded hotels across 14 African countries. This strategic move is
part of African Hotel Development’s business realignment strategy;
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On the Unquoted Securities Platform, Acorn D-REIT and I-REIT traded at Kshs 26.7 and Kshs 22.9 per unit,
respectively, as per the last updated data on 27 th June 2025. The performance represented a 33.4% and
14.5% gain for the D-REIT and I-REIT, respectively, from the Kshs 20.0 inception price. Additionally, ILAM
Fahari I-REIT traded at Kshs 11.0 per share as of 20 th June 2025, representing a 45.0% loss from the Kshs
20.0 inception price. The volume traded to date came in at 1.2 mn shares for the I-REIT, with a turnover
of Kshs 1.5 mn since inception in November 2015;
Click the link below to read the Cytonn Weekly report:https://cytonnreport.com/research/cytonn-h12025-markets
