EFG Hermes Kenya Macroeconomic Analytics June 2023

July 7, 2023, Uncategorized

Kenya is at its lowest valuation ever amid the improving macro environment The Kenyan market is down 23% YTD (31% in USD terms). Much of this is due to the lower valuation of Safaricom, but even the market ex-Safaricom is cheap (3.3x 12m Fwd P/E). Market liquidity is poor(3 million average daily trading volume (ADTV) […]

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The impact of the high cost of sugar on inflation

July 6, 2023, Uncategorized

The question on the breakfast table in most Kenyan households revolves around the sugar price. People are concerned about whether it will drop from a record high of Ksh 200 per kg or will it continue to rise in June, pushing up the inflation rate– which tracks commodity and services prices – over a year. […]

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Kenya’s Central Bank Rate

July 5, 2023, Uncategorized

When Dr Patrick Njoroge, the outgoing Central Bank of Kenya Governor, took over in June 2015, his first Monetary Policy Meeting – on July 7, 2015, saw the Central Bank Rate (CBR) rise by 1.5% to 11.5%. It was the largest in his eight years at the helm. The CBR is the rate at which […]

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The KCB Group (KCB) earnings growth will slow due to lower net interest margin (NIM), higher operating expenditure (OPEX), and loan loss provisions

July 4, 2023, Uncategorized

We lower our FY23-27e earnings per share (EPS) estimates for KCB by an average of 12.2%. Its risk pricing model (RPM) will result in lower gross yields reducing our average NIM estimates by 110 basis points to 7.9%. We also raise our FY23-27e operating expenditure (OPEX) estimates by 14.0% on average to reflect the impact […]

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