In our Cytonn Report this week, we analysed the performance of Kenya’s Equities, Fixed Income and the
Real Estate markets for the week ended, with a special focus on Kenya’s Listed Banks Q1'2025 Report.
Below are the highlights;
a) Fixed Income:
During the week, T-bills were oversubscribed for the sixth consecutive week, with the overall subscription
rate coming in at 237.4%, lower than the subscription rate of 255.9% recorded the previous week.
Investors’ preference for the shorter 91-day paper persisted, with the paper receiving bids worth Kshs
14.6 bn against the offered Kshs 4.0 bn, translating to a subscription rate of 364.9%, significantly higher
than the oversubscription rate of 197.9%, recorded the previous week. The subscription rate for the 182-
day paper decreased to 25.7% from the 104.9% recorded the previous week, while the subscription rate
for the 364-day paper decreased to 397.9% from the 430.0% recorded the previous week. Notably, the
government accepted only Kshs 17.2 bn worth of bids out of Kshs 57.0 bn bids received, translating to an
acceptance rate of 30.2%. The yields on the government papers were on a downward trajectory with the
yields on the 364-day paper decreasing the most by 24.9 bps to 9.75% from the 10.00% recorded the
previous week while the yields on the 91-day and 182-day papers decreased by 10.3 bps and 4.9 bps to
8.18% and 8.49%, from the 8.28% and 8.54% recorded the previous week;
In the primary bond market, the government is looking to raise Kshs 50.0 bn for budgetary support
through the reopened bonds; FXD1/2020/015 and SDB1/2011/030 with fixed coupon rates of 12.8% and
12.0% respectively and tenors to maturity of 9.7 years and 15.7 years respectively. The period of sale for
the two bonds opened on Tuesday, 10th June 2025 and will close on 18th June 2025. Our bidding range
for FXD1/2020/015 and SDB1/2011/030 is 12.25%-13.00% and 13.25%-14.25% respectively. Key to note,
the Savings Development Bond, SDB1/2011/030, was last reopened in September 2014;
The monetary policy committee met on June 10th, 2025, to review the outcome of its previous policy
decisions against a backdrop of elevated uncertainties to the global outlook for growth, lower but sticky
inflation in advanced economies, heightened trade tensions as well as persistent geopolitical tensions.
The MPC decided to lower the CBR rate by 25.0 bps to 9.75%, from 10.00% in April 2025;
During the week, The Energy and Petroleum Regulatory Authority (EPRA) released their monthly
statement on the maximum retail fuel prices in Kenya, effective from 15th June 2025 to 14th July 2025.
Notably, the maximum allowed price for Super Petrol increased by Kshs 2.7, while Diesel and Kerosene
decreased by Kshs 2.0 and Kshs 2.1 respectively. Consequently, Super Petrol, Diesel and Kerosene will
now retail at Kshs 177.3, Kshs 162.9 and Kshs 146.9 per litre respectively, from Kshs 174.6, Kshs 164.9
and Kshs 149.0 per litre respectively, representing an increase of 1.5% for Super Petrol, and decreases of
1.2% and 1.4% for Diesel and Kerosene respectively;
b) Equities:
During the week, the equities market was on an upward trajectory, with NASI gaining the most by 9.0%
while NSE 10, NSE 25 and NSE 20 gained by 6.0%, 5.2% and 3.1% respectively, taking the YTD
performance to gains of 17.8%, 10.8%, 9.5% and 9.1% for NASI, NSE 20, NSE 10 and NSE 25. The equities
market performance was driven by gains recorded by large-cap stocks such as Safaricom, Cooperative
Bank and Stanbic Bank of 17.1%, 7.7% and 5.7%, respectively.
Additionally, in the regional equities market, the East African Exchanges 20 (EAE 20) share index lost by
4.0 bps, attributable to losses recorded by large cap stocks such as MTN Uganda, I&M Rwanda and
Bralirwa Limited of 2.4%, 0.4% and 0.3% respectively. The performance was however supported by gains
recorded by large cap stocks such as Safaricom, Tanga Cement Limited and Bank of Baroda Uganda of
19.5%, 12.9% and 8.3% respectively;
c) Real Estate:
Kenya’s Affordable Housing Program, is facing significant financial setbacks due to uncollected rent from
government-owned housing units. The state is losing millions in potential revenue, undermining the
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program’s sustainability and its ability to fund new residential projects, a concern linked to the real estate
sector’s reliance on efficient resource management, as discussed in prior conversations about JVs and the
housing levy.
During the week, Superior Homes Kenya (SHK) and HFC Kenya, a subsidiary of HF Group, signed an
Memorandum of Understanding (MOU) to enhance homeownership accessibility in Kenya. This strategic
partnership merges Superior Homes’ expertise in developing master-planned communities with HFC’s
innovative financing solutions, offering homebuyers concessional mortgage rates of 9.5%, 20-year loan
terms, and expedited loan approvals
During the week, it was noted that Kenya’s commercial banks significantly boosted funding for the
building and construction sector by Kshs 19.3 bn equivalent to 11.7% in the first quarter of 2025,
signaling a robust resurgence in real estate development. This double-digit growth reflects increased
financing for new commercial and residential projects, as well as the resumption of stalled developments
across the country.
During the week, the treasury highlighted that Kenya is set to initiate KShs 70.0 bn in Public-Private
Partnership (PPP) deals starting July 1, 2025, to address its pressing infrastructure financing needs. These
ambitious projects, modelled after large-scale, privately initiated proposals akin to those previously
pursued, target critical sectors such as energy, transport, and water, which are foundational to the real
estate industry.
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 23rd May 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 23rd May 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.
d) Focus of the Week:
Following the release of the Q1’2025 results by Kenyan listed banks, the Cytonn Financial Services
Research Team undertook an analysis on the financial performance of the listed banks and identified the
key factors that shaped the performance of the sector.
Click the link below to read the Cytonn Weekly report: https://cytonnreport.com/research/kenyas-listed-
banks-7
