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 REITs H1'2025 performance. Below are
the highlights;
a) Fixed Income
This week, T-bills were oversubscribed for the first time in four weeks, with the overall subscription rate
coming in at 113.5%, higher than the subscription rate of 96.6% recorded the previous week. Investors’
preference for the shorter 91-day paper persisted, with the paper receiving bids worth Kshs 7.8 bn
against the offered Kshs 4.0 bn, translating to a subscription rate of 194.3%, higher than the subscription
rate of 123.2% recorded the previous week. The subscription rates for the 182-day paper increased to
120.8% from the 74.6 % recorded the previous week, while that of the 364-day paper decreased to 73.9%
from the 108.0% recorded the previous week The government accepted a total of Kshs 24.3 bn worth of
bids out of Kshs 27.2 bn bids received, translating to an acceptance rate of 89.1%. The yields on the
government papers were on a downward trajectory with the yields on the 182-day paper decreasing the
most by 4.9 bps to 8.07% from the 8.12% recorded the previous week. The yields on the 91-day paper
and 364-day paper decreased by 1.2 bps and 0.9 bps to 8.00% and 9.57% respectively, from the 8.01%
and 9.58% respectively recorded the previous week
The Central Bank of Kenya released the auction results for the IFB1/2018/015 and IFB1/2022/019 tap sale
with tenors to maturities of 7.4 years and 15.4 years respectively and fixed coupon rates of 12.5% and
13.0% respectively. The bonds were oversubscribed, with the overall subscription rate coming in at
414.9%, receiving bids worth Kshs 207.5 bn against the offered Kshs 50.0 bn. The government accepted
bids worth Kshs 179.8 bn, translating to an acceptance rate of 86.7%. The allocated average yield for the
accepted bids for the IFB1/2018/015 and IFB1/2022/019 was at 13.0% and 14.0% respectively. Given the
bonds are tax free, compared to 10.0% withholding tax for other long-term bonds, the effective tax yield
is 14.4% and 15.6% for the IFB1/2018/015 and IFB1/2022/019 respectively. With the Inflation rate at
4.1% as of July 2025, the real returns of the IFB1/2018/015 and IFB1/2022/019 are 8.9% and 9.9%;
We are projecting the y/y inflation rate for July 2025 to increase marginally to within the range of 3.9% -
4.4% mainly on the back of rising fuel prices in June and the decrease in the Central Bank Rate (CBR) by
25.0 bps to 9.50% from 9.75%.
During the week, the global ratings agency, Moody’s announced its revision of Kenya’s credit outlook to
positive from negative, while maintaining the credit rating at Caa1, on the back of a likelihood of an ease
in liquidity risks and improved debt affordability;
b) Equities
During the week, the equities market was on an upward trajectory, with NSE 20 gaining the most by
3.3%, while NASI, NSE 10 and NSE 25 gained by 2.6%, 2.5% and 1.9% respectively, taking the YTD
performance to gains of 35.7%, 34.0%, 27.0% and 26.7% for NASI, NSE 20, NSE 10 and NSE 25
respectively. The equities market performance was driven by gains recorded by large-cap stocks such as
DTB, EABL and Safaricom of 7.7%, 5.3% and 5.0% respectively. The performance was, however, weighed
down by losses recorded by large cap stocks such as Standard Chartered, NCBA and BAT of 6.0%, 3.9%
and 0.2% respectively.
Additionally, in the regional equities market, the East African Exchanges 20 (EAE 20) share index gained
by 4.0 bps, attributable to gains recorded by large cap stocks such as NMB Bank, Tanzania Breweries
Limited and Tanga Cement Limited of 5.9%, 3.8% and 3.6% respectively;
2
During the week, Standard Chartered released its H1’2025 financial results, with its Core Earnings per
Share (EPS) decreasing by 21.4% to Kshs 21.4, from Kshs 27.2 in H1’2024;
During the week, Diamond Trust Bank, released its H1’ 2025 financial results with its Core earnings per
share increasing to Kshs 19.2 from Kshs 15.5 in H1’ 2024;
I&M Group released their H1’ 2025 results with its core Earnings per share reducing by 37.9% to Kshs 4.5
from Kshs 3.3 in H1’ 2024;
During the week, Sanlam Kenya Holdings released their H1’2025 results, recording an 89.0% decrease in
Profit After Tax to Kshs 0.03 bn, from the Kshs 0.3 bn recorded in H1’2024. The performance was mainly
driven by a 51.3% increase Net expenses from reinsurance contracts held, to Kshs 0.4 bn from Kshs 0.3 bn
in H1’2024, but supported by a 34.0% increase in insurance investment revenue to Kshs 3.1 bn in
H1’2025, from Kshs 2.3 bn in H1’2024;
During the week, Liberty Kenya Holdings released their H1’ 2025 results, with Profit After Tax decreasing
by 29.8% to Kshs 0.4 bn, from the Kshs 0.6 bn recorded in H1’2024. The performance was mainly driven
by 61.0% decrease in net insurance service revenue to Kshs 0.2 bn in H1’2025, from Kshs 0.6 bn in
H1’2024, coupled with 4.7% decrease in net investment revenue to Kshs 0.8 bn, from Kshs 0.9 bn in
H1’2024;
c) Real Estate
During the week, the National Social Security Fund (NSSF) sought to secure a Kshs 1.6 bn loan from a local
bank to kickstart the first phase of its ambitious Kisumu Lakeview Estate project—a major real estate
venture designed to deliver over 1,300 homes and commercial amenities in Kisumu. This marks one of
the fund’s largest investments outside Nairobi in more than ten years, reflecting its growing focus on
regional development and real estate as a source of long-term returns for pensioners
During the week, state-backed mortgage lender, Kenya Mortgage Refinance Company (KMRC) released
its H1 2025 financial results, which reported a 18.6% decrease in Profit After Tax (PAT) to Kshs 927.2 mn
from Kshs 956.2 mn recorded in H1’2024 attributable to 24.5% increase in interest expense to Kshs 649.8
mn in H1’2025 from 521.7 mn in H1’2024.
On the Unquoted Securities Platform, Acorn D-REIT and I-REIT traded at Kshs 27.4 and Kshs 23.2 per unit,
respectively, as per the last updated data on 15 th August 2025. The performance represented a 37.0% and
16.0% 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 15 th August 2025, representing a 45.0% loss from the Kshs
20.0 inception price.
Focus of the Week
Following the release of the H1’2025 results by all four authorized Real Estate Investment Trusts (REITs)
in Kenya, Cytonn Real Estate Research Team undertook an analysis of the financial performance of the
REITs and identified the key factors that shaped the performance of the sector, discussing the
background and structure of REITs in Kenya, and assess the financial performance of the current REITs in
the market during H1’2025 in terms of operational metrics, profitability metrics, leverage ratios, liquidity
ratios and valuation metrics;
Click the link below to read the Cytonn Weekly report: https://cytonnreport.com/research/reits-
h12025-performance
