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1
CAPITAL 3Q20 MACROECONOMIC
OUTLOOK
JULY 2020
2
CAPITAL 3Q20 MACROECONOMIC
OUTLOOK
JULY 2020
Executive Summary
In March 2020, when the first case of COVID-19 was reported in Kenya, many didn’t anticipate that
the whole country would be glaring at a pandemic of a global nature. Kenya has recorded over
10,000 positive infections with the numbers increasing at a faster pace post relaxation of the
containment measures. This pandemic has brought about economic uncertainties that have led to
challenging business environment, occasioned by job losses. Deterioration in both public and
private sector operating environments, has pushed players to do some stress-testing on the
fundamentals which form the backbone for any economy. In our macroeconomic and fixed income
outlook note, we give highlights of our expectations on the key economic indicators. Below is a
summary:
• Kenya’s economy is projected to contract by 0.3% in 2020 impacted by the slowdown
especially in the second and third quarters of the year indicating the country will have
entered recession. We however expect gradual recovery to take place in the 4th quarter.
Our bearish growth projections are mainly on account of the COVID -19 shock which has
caused the collapse of international trade, worsened business sentiment and reduced
household consumption.
• There has been a recent surge in global oil prices (+12.2% m/m rise in the price of Brent
Crude to USD 43.24 per barrel) which is expected to impact fuel inflation (5.4% at end
2Q20) in the course of the quarter. We expect inflation to remain anchored in the third
quarter at an average of 4.8% on account of reduced consumer demand and lower food
prices due to favorable weather conditions.
• The committee will be meeting on July 29th for a review and in our opinion, we anticipate
the committee to maintain a neutral stance to anchor the economy. Private sector
credit growth is expected to moderate owing to the expected weakness in economic
activity for key sectors directly affected by COVID – 19. This is in addition to the reduced
lending by financial institutions as they avert a spike in non-performing loans, that could
accentuate from the current economic situation.
• We expect the shilling to remain stable within current levels and exchange within a
range of 105-108 against USD on account of strong foreign reserves which will cushion
any further shilling volatility.
• We expect the cumulative 12-month current account deficit to narrow to an average
of 5.3% in the third quarter. This will be on account of a narrowing merchandize trade
imports as we anticipate the imports to remain subdued.
• Appetite for T-bills is expected to remain prevalent in the market on account of high
liquidity and increased investments from financial institutions as they shy away from
aggressive lending. We thus expect a further decline of around 30-50 bps on the T-bill
rates in the course of third quarter.
• We anticipate the fiscal agent to have a mix of both medium- and long-term papers in
the upcoming new issues, in a bid to plug in the deficit. They may focus on the long end
(10 years and above) as they seek to lengthen the maturity profile of the domestic debt.
Key Statistics at a Glance:
Inflation |4.59%|June
GDP Growth |4.9%|1Q20
Interbank Rate|2.36%|09th July
Central Bank Rate|7.00%|June
91- Day T-Bill|6.27%|July 13th
182-Day T-Bill|6.76%| July 13th
364-Day T- Bill|7.70%| July 13th
KES/USD|107.05|July 13th
Fiscal Deficit as a % of GDP |5.6% l
2019/20
Current account deficit as a % of
GDP | 5.2% |May 2020
Public debt to GDP –|63.7%
|2019/20
Research Analyst
Mercyline Gatebi
Direct line: +2540709 812 732
3
CAPITAL 3Q20 MACROECONOMIC
OUTLOOK
JULY 2020
Table of Contents Economic Outlook against Coronavirus Pandemic in Kenya .................................................................... 4
Real Sector .................................................................................................................................................. 5
GDP – Are we Heading into a Recession?.............................................................................................. 5
Fiscal Position – Consolidation Remains a Pipeline Dream .................................................................. 6
Public Debt – Is Sustainability still on Course? ..................................................................................... 6
Monetary and Financial Sector .................................................................................................................. 7
Inflation –Expected to Remain Range Bound ....................................................................................... 7
Interest Rates Trends – Accommodative Policy Mechanism by MPC ................................................. 8
Exchange Rate Trends – Uncertainties Bite into the Shilling’s Strength .............................................. 8
External Sector ........................................................................................................................................... 9
Balance of trade ..................................................................................................................................... 9
Fixed Income Outlook .............................................................................................................................. 11
4
CAPITAL 3Q20 MACROECONOMIC
OUTLOOK
JULY 2020
Economic Outlook against Coronavirus Pandemic in Kenya
Sector Contribution Pandemic Impact Assessment
Sector to GDP contribution (1Q20)
2018 2019 Growth in Sector 2020
Growth in Sector 2020
Actual (Growth rate)
Actual (Growth rate)
(Best Scenario)
(Likely Scenario)
Wholesale and retail trade
High 6.40% 5.60% 6.30% -2.70% -7.20%
Transport and Storage
High 6.90% 6.50% 6.40% -1.20% -5.40%
Real Estate High 6.30% 5.10% 4.80% -3.10% -7.10%
Construction High 4.80% 6.70% 6.10% -1.20% -5.60%
Education High 3.90% 5.10% 4.50% 2.70% 2.70%
Accommodation and restaurant
High 0.70% 13.30% 11.00% -3.70% -11.10%
Manufacturing Moderate 6.70% 3.10% 3.50% -5.80% -9.00%
Finance and Insurance
Moderate 6.10% 4.00% 6.30% 4.10% 4.10%
Public & Administration
Moderate 3.60% 6.10% 6.20% 5.50% 5.80%
Energy and Water Moderate 1.90% 6.10% 7.80% 7.00% 6.50%
Mining and Quarrying Moderate 0.80% 3.10% 1.40% 1.00% 0.50%
Others Moderate 0.60% 4.90% 2.50% 7.20% 4.60%
Agriculture Low 42.40% 6.70% 4.70% 4.50% 4.00%
Health Low 1.30% 4.10% 5.40% 7.50% 7.50%
ICT Low 1.10% 13.20% 10.20% 16.00% 16.00%
Professional & support services
Low 0.80% 5.90% 6.00% 5.80% 6.00%
Real GDP Growth 6.30% 5.40% 1.60% -0.30% Source; KCB Group projections, KNBS
5
CAPITAL 3Q20 MACROECONOMIC
OUTLOOK
JULY 2020
• Transport and storage, construction, accommodation and restaurant and education will experience the highest
impact from the pandemic.
• Health and ICT expected to post highest growth in the period year on year.
• Agriculture sector is expected to post flat growth year on year.
Real Sector
GDP – Are we Heading into a Recession?
Real GDP grew by 4.9% during the review period compared to 5.5% growth in the first quarter of 2019. Though Kenya was somewhat
spared the brunt of the COVID-19 pandemic in the first quarter of 2020, the economy was affected by the resultant uncertainty that
was already slowing economic activity in some of the country’s major trading partners. The deceleration in growth was mainly
attributed to slower growth in most sectors of the economy, with accommodation and food service activities recording the highest
contraction of 9.3% on account of the coronavirus containment measures. Agriculture, forestry and fishing sector posted a growth of
4.9% in 1Q20 against a 4.7% growth in 1Q19. Other sectors that experienced robust growth included transport and storage (6.2%),
financial and insurance activities (6.0%), construction (5.3%) and Wholesale and Retail trade (6.4%).
Kenya’s economy is projected to contract by 0.3% in 2020 as a result of the slowdown especially in the second and third quarters
of the year indicating the country will have entered recession. We however expect gradual recovery to take place in the 4th quarter.
Our bearish growth projections are mainly on account of the COVID -19 shock which has caused the following;
• International trade collapsed 20.5% y/y in the months of April and May, attributed to the decline in export and imports in
the order of 5.1% y/y and 25.3% y/y, respectively. This is despite tea export volumes growing 60.8% y/y rising the value of
tea exports by 36.7% y/y.
• Worsened business sentiment as illustrated by the Purchasing Managers’ Index reading currently at sub 50 levels (June
reading - 46.6, 2Q20 reading – 39.4)
• Reduced household consumption as indicated by the average 1.99% core inflation in 1Q20 compared to 3.23% in 1Q19.
Source; KNBS
-15.0
-10.0
-5.0
0.0
5.0
10.0
15.0
20.0
Growth by sector
Q3 2015 Q3 2016 Q3 2017
Q3 2018 Q3 2019 Q1 2020
5.7 5.9
4.9
6.35.9
0
1
2
3
4
5
6
7
5,000,000.00
5,500,000.00
6,000,000.00
6,500,000.00
7,000,000.00
7,500,000.00
8,000,000.00
8,500,000.00
9,000,000.00
9,500,000.00
10,000,000.00
2015 2016 2017 2018 2019
GDP at Market Prices vs Growth rate
GDP at market prices (KES Mn) GDP Growth (%)
6
CAPITAL 3Q20 MACROECONOMIC
OUTLOOK
JULY 2020
Fiscal Position – Consolidation Remains a Pipeline Dream
Public Debt – Is Sustainability still on Course?
Given the projected expenditures and revenues, the fiscal deficit, including grants, in the FY 2020/21, is projected at KES 823.2Bn (7.3%
of GDP). This will maintain fiscal consolidation over the medium term to stabilize growth in public debt. The fiscal deficit in FY 2020/21
is expected to be financed by net external financing of KES 349.7Bn (3.1% of GDP), net domestic borrowing of KES 486.2Bn (4.3% of GDP)
and other net domestic repayments of KES 12.6Bn.
We anticipate revenue underperformance, following the new tax measures that have been recently passed, which include; 100% tax
relief on persons earning below KES 24,000, a reduction of the top band tax rate from 30% to 25%, a reduction of corporate tax from
30% to 25% among others. This in tandem is expected to result to a KES 172Bn revenue gap which the government expects to fill through
introduction of VAT on some essential commodities such as farm inputs, machinery and animal feeds. We are of the view that these
measures are not adequate, hence a cut on recurrent expenditure could be the best stop gap to the widening fiscal deficit.
While the fiscal deficit in the current fiscal year is estimated at 7.3%, we are of the view this may not be achieved due to;
a) Lower nominal GDP.
b) Revenue underperformance.
Source; National Treasury
-10.00%
-8.00%
-6.00%
-4.00%
-2.00%
0.00%
-2000000
-1000000
0
1000000
2000000
3000000
Govt revenue, expenditure vs fiscal deficit as a % of GDP
Total Revenue (Mn)
Total Expenditure (Mn)
Fiscal Deficit
Fiscal Deficit as a % of GDP
0
500000
1000000
1500000
2000000
2500000
3000000
2014/20152015/20162016/20172017/20182018/2019
Rect expenditure vs dvpt expenditure
Recurrent Expenditure (Kes Mn)
Development Expenditure (Kes Mn)
Total Expenditure
Kenya’s overall public debt has increased over the past two years, driven by increased expenditure and below target revenue collection
which has widened the fiscal deficit. As of June 2020, the total public debt stood at KES 6.50Tn against KES 6.05Tn in June 2019 (a rise
of 7.4%). External debt grew faster at 8.6% y/y compared to domestic debt which grew 6.2% y/y. Kenya’s total outstanding debt
currently stands at 48% domestic debt and 52% external debt.
A rising fiscal deficit has necessitated the fiscal agent to review the net domestic borrowing target upwards to KES 493.4Bn for the
current fiscal year 2020/21. The net domestic borrowing target for FY2019/20 (409.0Bn) was achieved, hence we believe that despite
a tough operating environment, this year’s target is well achievable although we anticipate revisions on the target as the year runs
through the supplementary estimates. We anticipate a significant spike in the external borrowing estimates occasioned by the local
currency depreciation, as the repayments are made in foreign denomination.
A higher uptake of domestic debt is also expected during the current quarter, mainly arising from an estimated KES 355.14Bn in T-
bill maturities and coupon payments.
7
CAPITAL 3Q20 MACROECONOMIC
OUTLOOK
JULY 2020
Monetary and Financial Sector
Inflation –Expected to Remain Range Bound
Source; CBK, National Treasury
0
1
2
3
4
5
6
7
Dec-20 Dec-19 Dec-18 Dec-17
Public Debt Composition in Tns
Domestic Debt External Debt Total Debt
0.00%5.00%10.00%15.00%20.00%25.00%30.00%35.00%40.00%
- 1,000,000.00 2,000,000.00 3,000,000.00 4,000,000.00 5,000,000.00 6,000,000.00 7,000,000.00 8,000,000.00
Govt revenue against Public debt
Total Revenue (Kes Mn)
Public Debt (Kes Mns)
Total revenue as a % of public debt
Overall inflation declined to 4.59% in June from 5.33% in May as food inflation declined to 8.15% from 10.55% in May. Month-on-
month, Food and Non-Alcoholic Drinks’ Index decreased by 1.27% in June 2020, compared to a decrease of 0.24% in May 2020. This
resulted from observed price decreases outweighing increases. During the same period, Housing, Water, Electricity, Gas and Other
Fuels’ Index, decreased by 0.81%. This was mainly attributed to a 21.33% decrease in the cost of kerosene.
Transport index increased by 6.89% year-on-year in June compared to 5.20% in May, attributed to increasing costs of transport due to
the containment measures. There has been a recent surge in global oil prices (+12.2% m/m rise in the price of Brent Crude to USD
43.24 per barrel) which is expected to impact fuel inflation (5.4% at end 2Q20) in the course of the quarter. Despite this, we expect
inflation to remain anchored in the third quarter at an average of 4.8% on account of reduced consumer demand and lower food
prices due to favorable weather conditions.
Source; KNBS
95.00
100.00
105.00
110.00
3.00
4.00
5.00
6.00
7.00
8.00
Feb-19
Apr-19
Jun-19
Aug-19
Oct-19
Dec-19
Feb-20
Apr-20
Jun-20
CPI (RHS)Inflation M-o-MInflation (annual average %)
-50510152025
0
5
10
15
20
Feb
-16
Jun
-16
Oct
-16
Feb
-17
Jun
-17
Oct
-17
Feb
-18
Jun
-18
Oct
-18
Feb
-19
Jun
-19
Oct
-19
Feb
-20
Fuel, food and Non-food Non- Fuel Inflation Trends
Fuel Inflation NFNF
8
CAPITAL 3Q20 MACROECONOMIC
OUTLOOK
JULY 2020
Interest Rates Trends – Accommodative Policy Mechanism by MPC
Exchange Rate Trends – Uncertainties Bite into the Shilling’s Strength
The Monetary Policy Committee (MPC) met on 25th June 2020 and concluded that the current accommodative stance was adequate
and therefore decided to retain the CBR at 7.0%. The committee will be meeting on July 29th for a review and in our opinion, we
anticipate the committee to maintain a neutral stance to anchor the economy.
Private sector credit grew by 8.1% in the 12 months to May 2020 down from 9% (April) and 8.9% (March). The growth will however
moderate owing to the expected weakness in economic activity for key sectors directly affected by COVID – 19. This is in addition to
the reduced lending by financial institutions as they avert a spike in non-performing loans, that could accentuate from the current
economic situation. Interbank rate stood at an average of 4.18% (2Q20) compared to 4.36% in 1Q20. Liquidity was higher in the month
of June compared to May as depicted by the declining interbank rates. Month to date, interbank is currently at 2.42%.
Source; CBK
0.00
10.00
20.00
30.00
40.00
50.00
60.00
0.00
2.00
4.00
6.00
8.00
10.00
12.00
Jun-17 Jan-18 Aug-18 Mar-19 Oct-19
Private sector credit growth vs Credit to Government
Credit to Private Sector (%)
CBR
Credit to Government (RHS %)
2
3
4
56
7
8
9
10
11
Jan
-18
Mar
-18
May
-18
Jul-
18
Sep
-18
No
v-1
8
Jan
-19
Mar
-19
May
-19
Jul-
19
Sep
-19
No
v-1
9
Jan
-20
Mar
-20
May
-20
Jul-
20
Domestic Interest Rates
Interbank rates CBR 91-Day T-Bill
The shilling depreciated quarter on quarter by 4.5%, 4.3% and 1.3% against the USD, Euro and Sterling Pound, respectively, to close
at 106.52, 120.14 and 131.17. The depreciation could be attributed to a decline in dollar inflows as a result of the uncertainties
brought about by coronavirus pandemic as well as strengthening of the hard currency in global markets.
Despite the weak performance of exports in April, there was a rebound in May with exports of goods improving by 4.1% in the period
January to May 2020, mainly driven by tea, horticulture and re-exports. Remittance inflows recovered in May 2020 to USD 258.2Mn
from USD 208.2Mn in April, an increase of 24%. The cumulative inflows in the 12 months to May totaled USD 2,816Mn compared to
USD 2,739Mn in the 12 months to May 2019, reflecting a growth of 2.8%. CBK has however been rendering support to the weakening
shilling through open market operations.
The CBK usable foreign exchange reserves remained adequate at USD 9,717Mn (5.84 months of import cover) as at July 02nd,
compared to USD 7,965Mn (4.84 months of import cover) as at end of March 2020. The reserves were buoyed by inflows (c. USD
2Bn) from international financial institutions within the quarter. We expect the shilling to remain stable within current levels and
exchange within a range of 105-108 against USD on account of strong foreign reserves which will cushion any further shilling
volatility.
9
CAPITAL 3Q20 MACROECONOMIC
OUTLOOK
JULY 2020
External Sector
Balance of trade
Source; CBK
4.00
4.50
5.00
5.50
6.00
6.50
7.00
7000
7500
8000
8500
9000
9500
10000
10500
06
/06
/20
19
06
/07
/20
19
06
/08
/20
19
06
/09
/20
19
06
/10
/20
19
06
/11
/20
19
06
/12
/20
19
06
/01
/20
20
06
/02
/20
20
06
/03
/20
20
06
/04
/20
20
06
/05
/20
20
06
/06
/20
20
Foreign reserves vs months of import cover
Foreign Exchange Reserve (USD Mn - RHS)Months of Import Cover
100
105
110
115
120
125
130
135
140
08
/07
/20
19
08
/08
/20
19
08
/09
/20
19
08
/10
/20
19
08
/11
/20
19
08
/12
/20
19
08
/01
/20
20
08
/02
/20
20
08
/03
/20
20
08
/04
/20
20
08
/05
/20
20
08
/06
/20
20
08
/07
/20
20
Currencies Performance - USD, GBP, EURO
USD EURO STG POUND
Kenya’s current account balance has generally been in deficit since 2004 when the deficit stood at 0.82% of GDP. The deficit was
estimated to be 4.6% of GDP as of 2019 and 5.0% of GDP in 2018. Latest data indicates the current account deficit narrowed to 5.2% in
May 2020 from 5.6% in April 2020.
There has been a faster growth in imports of goods into the country relative to the exports. The imports have been largely in machinery
and transport equipment, manufactured goods and oil products for industrial purposes, while growth in the exports has been sluggish
with little diversification away from the traditional exports of coffee, tea and horticulture. Tourism services have also been a key revenue
earner for the country although the sector continues to face headwinds from the ongoing coronavirus pandemic.
We expect the cumulative 12-month current account deficit to narrow to an average of 5.3% in the third quarter. This will be on
account of a narrowing merchandize trade imports as we anticipate the imports to remain subdued. Exports value will continue to
improve even as demand for our key products such as tea and horticulture increases. The recovery in diaspora remittances may be
sustained against the backdrop of the May numbers (+6.2% y/y; +24.0% m/m to USD 258.2Mn). In the current business environment,
we don’t anticipate heavy foreign direct investment to be imminent.
The biggest risk to our current account deficit will be the rising global oil prices (currently at USD 43 per barrel) which could lead to a
higher imports bill and in tandem a higher trade deficit.
10
CAPITAL 3Q20 MACROECONOMIC
OUTLOOK
JULY 2020
Source; KNBS
-400000.00-300000.00-200000.00-100000.00
0.00100000.00200000.00300000.00400000.00500000.00600000.00
1Q
17
2Q
17
3Q
17
4Q
17
1Q
18
2Q
18
3Q
18
4Q
18
1Q
19
2Q
19
3Q
19
4Q
19
1Q
20
Kenya Balance of Trade
Imports (Mns) Exports (Mns) Trade Balance -12.2
-10.5
-8.8
-10.4
-6.7
-5.2
-6.7
-5 -4.6
-5.8
-14
-12
-10
-8
-6
-4
-2
0
2011 2012 2013 2014 2015 2016 2017 2018 2019 2020
Current account deficit to GDP (%)
11
CAPITAL 3Q20 MACROECONOMIC
OUTLOOK
JULY 2020
Fixed Income Outlook
Evolution of the Yield Curve
Redemptions to the tune of KES 355.14Bn anticipated.
From the illustration alongside, it is evident that yields continued to
drop across the spectrum of the yield curve, especially on the short end
(a decline of 70bps year to date on average).
Notably, the yield curve is edging lower than the beginning of the year
curve on account of heightened liquidity in the money market as
investors increase exposure in government securities. This is further
accentuated by investors wishing to position themselves in the short -
term papers due to the uncertainty present in the market.
Appetite for short -term papers is expected to remain prevalent in the
market on account of high liquidity and increased investments from
financial institutions as they shy away from aggressive lending. We
thus expect a further cut of around 30-50 bps on the short-term end
in the course of third quarter.
Source; NSE
6
8
10
12
14
16
91
Day 1 3 5 7 9
11
13
15
17
19
21
23
Yield curve
31st Mar 2020 30th Dec 2019
30th Jun 2020
The fiscal agent will be seeking to redeem estimated T-bill maturities (KES 304Bn) and coupon payments (KES 51.14Bn) in 3Q20 vs. the
targeted issues worth KES 468Bn in both T-Bills and bonds (assuming no tap sales and the offer amounts for bond papers is KES 60Bn).
So far, the fiscal agent has been able to raise KES 90.13Bn which is within the pro-rated target. Amounts equal to the payments (KES
355.14Bn) will be used to repay the principal & interest amounts of papers maturing within the quarter, thus being rolled over. We are
optimistic that CBK will raise more than the required amount to offset all the obligations falling due this quarter on account of the
high liquidity in the market and keenness by banks to lend to the government other than advancing credit to private sector. The high
uptake of T-Bills may lead to increased concentration risk on the short end which may push CBK to roll over the investors into treasury
bonds as they had earlier done.
Source; CBK
12.8822.73
15.1614.78
39.42
11.44
80.00
61.72
45.89
107.65
123.87
72.48
0.00
20.00
40.00
60.00
80.00
100.00
120.00
140.00
Jul-20 Aug-20 Sep-20
T-Bill Redemptions in Bns
91D Redemptions 182D Redemptions
364D Redemptions Total Redemptions
14.83
21.93
14.38
0.00
5.00
10.00
15.00
20.00
25.00
Jul-20 Aug-20 Sep-20
T-Bond Coupon Payments (Bns)
12
CAPITAL 3Q20 MACROECONOMIC
OUTLOOK
JULY 2020
Moderate Bonds Turnover expected in 3Q20
Outlook
Secondary bonds market recorded a turnover of KES 133.35Bn in
2Q20 compared to KES 191.13Bn in 2Q19, a decline of 30.2%.
Month to date, bonds turnover stands at KES 18.37Bn.
We are of the view that 3Q20 will experience moderate to high
bonds activity as investors shift focus to risk free securities, owing
to concerns around effects of the pandemic.
Source; NSE
66.75
54.61
69.77
84.70
41.5046.13
38.21
50.38
16.48
36.79
47.62
65.70
29.34
46.61
57.40
0.0010.0020.0030.0040.0050.0060.0070.0080.0090.00
Bonds Turnover m-o-m
We anticipate the fiscal agent to have a mix of both medium- and long-term papers in the upcoming issues towards meeting the
deficit. The domestic borrowing pattern seems not to follow the Medium-Term Debt Management Strategy which preferred longer
dated papers and a reduction in T-Bill issuance. However, we believe the fiscal agent may focus on the long end (tenors of 10 years
and above) as they seek to lengthen the maturity profile of the domestic debt. The funds will be plugged into budgetary support and
meeting upcoming debt obligations (principal and interest payments). Due to increased liquidity, CBK is at minimal pressure to meet the
upcoming T-Bill redemptions (cumulative KES 304Bn in 3Q20), with the bulk of it from 364 T-Bill papers. However, if liquidity starts
drying up, rates will start rising thus shifting the yield curve upwards.
13
CAPITAL 3Q20 MACROECONOMIC
OUTLOOK
JULY 2020
-
Disclaimer This report has been prepared by KCB Capital Limited (hereinafter KCB Capital), a subsidiary of KCB Group PLC. This report is for distribution
only under such circumstances as may be permitted by applicable law. Nothing in this report constitutes a representation that any investment strategy or recommendation contained herein is suitable or appropriate to a recipient’s individual circumstances or otherwise constitutes a
personal recommendation. It is published solely for information purposes, it does not constitute an advertisement and is not to be construed as a solicitation or an offer to buy or sell any securities or related financial instruments in any jurisdiction. No representation or warranty,
express or implied, is provided in relation to the accuracy, completeness or reliability of the information contained herein, nor is it intended to be a complete statement or summary of the securities, markets or developments referred to in the report. KCB Capital does not undertake
that investors will obtain profits, nor will it share with investors any investment profits nor accept any liability for any investment losses.
Investments involve risks and investors should exercise prudence in making their investment decisions. The report should not be regarded by recipients as a substitute for the exercise of their own judgment. Any opinions expressed in this report are subject to change without notice
and may differ or be contrary to opinions expressed by other business areas or groups of KCB Group PLC as a result of using different assumptions and criteria.
Research will initiate, update and cease coverage solely at the discretion of KCB Capital. The analysis contained herein is based on numerous
assumptions. Different assumptions could result in materially different results. The analyst(s) responsible for the preparation of this report
may interact with trading desk personnel, sales personnel and other constituencies for the purpose of gathering, synthesizing and
interpreting market information. KCB Capital is under no obligation to update or keep current the information contained herein. KCB Capital
relies on information barriers to control the flow of information contained in one or more areas within KCB Capital, into other areas, units,
groups or affiliates of KCB. The securities described herein may not be eligible for sale in all jurisdictions or to certain categories of investors.
Past performance is not necessarily indicative of future results. Foreign currency rates of exchange may adversely affect the value, price or
income of any security or related instrument mentioned in this report. For investment advice, trade execution or other enquiries, clients
should contact their local sales representative. Neither KCB Capital nor any of its affiliates, directors, employees or agents accepts any liability
for any loss or damage arising out of the use of all or any part of this report.
RESEARCH CONTACTS DEALING CONTACTS
Mercyline Gatebi Linus Kang’ara
Research Analyst Head of brokerage
[email protected] [email protected]
+254 709 812 732 +254 709 812 913
Patrick Mumu Joshua Munene
Research Analyst Trader
+254 709 812 733 +254 709 812 730
Timothy Macharia
Trader
+254 709 812 677
DISCLOSURES
