Banks struggle to protect profitability in 2025 as FX and interest incomes fall Full Report: Overview: Listed banks in our coverage for the period 1Q25 exhibited flat overall profitability, weighed down by sluggish credit demand amid struggling interest and FX income. Notably: Review of banking sector multiples: Low valuation, long-term potential Definitions: Stock Recommendation Absa…
Farewell to the Concession, Hello to Arbitration Umeme’s 20-year electricity distribution concession in Uganda officially ended on 31st March 2025, following the government of Uganda’s decision not to renew its concession agreement with Umeme. Post concession, Umeme’s distribution assets and operations were to be handed over to the state- owned Uganda Electricity Distribution Company Limited…
Highlights In the week, investors received comfort after it became clear that peak uncertainty did not necessarily mean that bad news was certain. U.S. equities posted strong gains for the week, with positive sentiment largely driven by news that the U.S. and China had agreed to a substantial de-escalation of trade tensions following talks in…
Turbulence, tariffs and the tech unwind Stocks went into the start of 2025 with the bull market solidly intact, albeit with valuations beginning to look stretched. The Fed appeared to have achieved a soft landing for the economy, and investors were still looking forward to rate cuts. That backdrop began to change as news that…
Highlights: The way to make the markets cheerful about a 10% tariff is to start from a 245% tariff rate. U.S. equities surged during the week, with the S&P 500 advancing by over 4.5% and the Nasdaq Composite gaining 6.43% from the previous week’s close. Several reports emerged within the week indicating that the ongoing…
Highlights Trade policy uncertainty remained the focal theme for a week that saw the major U.S. stock indices, the S&P 500 and the Nasdaq, fall into negative territory on a year-to-date basis for the first time this year. Tuesday marked the deadline for President Donald Trump’s previously announced tariffs of 25% on Canadian and Mexican…
Money Market Statistics Interbank lending took a step back this week, undoing last week’s gains as traded volumes shrank by 26.4% to KES 14.46bn from KES 19.65bn. Transaction counts followed suit, sliding 29.3%, alongside a 29.3% dip in transaction count. As liquidity tightened, banks charged each other a bit more, nudging the average lending rate…
EQUITIES MARKET COMMENTARY The market closed the week on a mixed note, with the N10, NSE 20, and NSE 25 advancing by 0.4% w/w, 2.6% w/w, and 0.8% w/w, respectively. Conversely, the NASI edged downwards by 0.5% w/w. Market activity eased to USD 136.66m (-14.6 % w/w). KCB Group dominated market activity, accounting for 35.8%…
Highlights After trailing behind the U.S. equity market in the past few years, European stocks are making a comeback having outperformed their U.S. peers so far. The European index was up 3.15% in the previous week boosting the year-to-date gains to 12.20% compared to just under 4% for the S&P 500. Hopes of an end…
Money Market Analysis In the money market, the interbank lending rate kept sliding as the impact of recent monetary action took shape. Banks lent to each other at an average of 10.5%, down 35.66bps from the previous week’s 10.9%. Meanwhile, trading activity picked up by 7.6% to KES 15.36bn from KES 14.29bn, signaling a liquidity…
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