Investors Bet Big on MMFs!

Bonsoir 👋🏿

It's Brian from The Kenyan Wall Street

In today's newsletter, Money Market Funds (MMFs) are surging in popularity and Unit Trusts are reaping big!

This and more business stories…

CAPITAL MARKETS  

Investors Bet Big on MMFs

Investors are pouring money into Money Market Funds (MMFs), driving an 81% surge in Kenya’s unit trust assets to KSh 389.2 billion by December 2024. MMFs remain the favorite, commanding 63% of assets, while dollar funds skyrocketed 114% in just nine months.

The CIC Unit Trust Scheme leads the market with KSh 82.5 billion in assets, followed by Sanlam at KSh 62.7 billion. Stanbic Unit Trust stole the show with a jaw-dropping 621% growth in just three months. Safaricom’s new Ziidi MMF is making waves, hitting KSh 1.713 billion in assets. Equity Investment Bank, however, was the lone loser, seeing its assets shrink. The Capital Markets Authority credits the boom to aggressive marketing and an influx of new funds. Here is the full story.

What I think :

🟢 The popularity surge in MMFs only means that investors are very dodgy in the Kenyan market, opting for low-risk, low-return investments potentially to protect themselves from the effects of inflation.

Today's Poll 

Last Friday's Poll Results

Let us get a bit cheeky! Do you think the monthly inflation rates are accurate and reflective of the real situation in the Kenyan economy?

 🟨🟨🟨⬜️⬜️⬜️ Yeah (33.33%)

🟩🟩🟩🟩🟩🟩 Naah (66.67%)

AUDIT

Billions Stuck in Treasury as Projects Stall

For 14 years, Kenya’s Treasury has played an elaborate game of hide-and-seek with KSh 46.5 billion meant for marginalized communities, disbursing barely a fraction of the mandated Equalisation Fund. The fund, designed to uplift historically neglected counties with better roads, water, and electricity, has been largely ignored.

Of the projects initiated, some remain unfinished, others sit unused, and a lucky few exist only on paper—alongside KSh 156 million in “unsupported expenditure.” Despite Parliament’s efforts to inject new life (and cash) into the initiative, Treasury coughed up a mere KSh 1.03 billion in 2023. More on the story.

INVESTMENT  

Afreximbank Funds Kenya's SEZ, Industrial Parks

Afreximbank has signed agreements with Kenya to finance industrial parks and SEZs worth KSh 387.5 million (US$3 billion) over three years. The projects include the Dongo Kundu Integrated Industrial Park in Mombasa and Naivasha Special Economic Zone II, strategically located along key trade routes. The projects, developed with Arise Integrated Industrial Platforms, aim to enhance Kenya’s manufacturing sector and attract both local and foreign investment. President William Ruto emphasized that this investment, not a loan, will help shift Kenya from reliance on raw commodity exports to value-added manufacturing. Afreximbank President Benedict Oramah highlighted the significance of these SEZs in reducing economic dependency and driving sustainable growth. The projects align with Kenya’s Vision 2030 and the Fourth Medium Term Plan (2023-2027) to boost trade, job creation, and economic development. Full story.

ANALYSIS  

Economic Costs of Servicing Debt are Threatening Development- UNDP

The UNDP warns that rising debt servicing costs, which reached a record $1.4 trillion in 2023, are threatening development in the world's poorest countries. Interest payments now exceed 10% of government revenue in 56 nations, forcing difficult trade-offs between debt repayment and essential spending. In Kenya, public debt hit KSh 11.24 trillion in January 2024, prompting the government to issue a $1.5 billion Eurobond to manage its liabilities. The UNDP urges G20 policymakers to implement systemic debt relief, reduce borrowing rates, and prioritize orderly debt restructuring to prevent further economic setbacks. Read the full article…

More Stories

• Mobility. Ride-hailing company Bolt has clarified that it fully covers the cost of discounts offered to passengers so that drivers receive the full fare before commission

• Private Equity. The European Investment Bank (EIB) has announced a $75 million investment in Helios Investors V, L.P. (Helios Fund V).

• Real Estate. International Workplace Group (IWG), a leading provider of flexible workspace solutions, has officially partnered with Karsan Ramji to introduce its HQ co-working space brand at the newly developed Purple Tower on Mombasa Road.

• Tech. French prosecutors dropped a criminal complaint by the Democratic Republic of Congo (DRC) against Apple in mid-February saying the allegations were not ‘well-founded’, new reports indicate.

▶️ On your watchlist

May your week shine!