In our Cytonn Monthly- May 2025 Report this week, we analyzed the performance of Kenya’s Equities, Fixed Income and the Real Estate markets for the month and week ended. Below are the highlights;
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Fixed Income
During the month of May 2025, T-bills were oversubscribed, with the overall average subscription rate coming in at 154.5%, albeit lower than the subscription rate of 183.0% recorded in April 2025. The overall average subscription rates for the 91-day, 182-day and 364-day paper decreased to 157.1%, 97.1% and 210.9% respectively, from 292.1%, 99.0% and 223.4% respectively recorded in April 2025. The average yields on the government papers were on a downward trajectory during the month, with the average 91-day, 182-day, and 364-day papers yields decreasing by 14.1 bps, 23.2 bps, and 17.2 bps to 8.4%, 8.6% and 10.0% respectively, from an average of 8.5%, 8.8% and 10.2% recorded the previous month. For the month of May, the government accepted a total of Kshs 136.4 bn of the Kshs 148.4 bn worth of bids received in T-Bills, translating to an acceptance rate of 92.0%, compared to an acceptance rate of 92.9% in the month of April;
During the week, T-bills were oversubscribed for the fourth consecutive week, with the overall subscription rate coming in at 229.6%, higher than the subscription rate of 142.4% recorded the previous week. Investors’ preference for the shorter 91-day paper persisted, with the paper receiving bids worth Kshs 19.2 bn against the offered Kshs 4.0 bn, translating to a subscription rate of 480.0%, significantly higher than the oversubscription rate of 113.2%, recorded the previous week. The subscription rates for the 182-day decreased to 97.7% from the 113.9% recorded the previous week while the 364-day papers increased to 261.3% from the 182.7% respectively recorded the previous week. The government accepted a total of Kshs 43.7 bn worth of bids out of Kshs 55.1 bn bids received, translating to an acceptance rate of 79.3%. The yields on the government papers were on a downward trajectory with the yields on the 91-day paper decreasing the most by 3.0 bps to 8.29% from the 8.32% recorded the previous week, while the yields on the 182-day and 364-day papers decreased by 1.1 bps and 0.3 bps to 8.56% and 10.00, from the 8.58% and 10.00% recorded the previous week;
Additionally, May 2025 bonds were oversubscribed, with the overall average subscription rate coming in at 147.7%, higher than the average subscription rate of 117.4% recorded in April 2025. The reopened bonds FXD1/2022/015 and FXD1/2022/025 with tenors to maturity of 12.0 years and 22.5 years respectively and fixed coupon rates of 13.9% and 14.2% respectively, received bids worth Kshs 57.1 bn against the offered Kshs 50.0 bn translating to an oversubscription rate of 114.2%. The government accepted bids worth Kshs 50.4 bn, translating to an acceptance rate of 88.2%, with the average accepted yields coming at 13.9% and 14.5% for the FXD1/2022/015 and FXD1/2022/025 respectively. Additionally, the reopened FXD1/2012/020, with a tenor to maturity of 7.6 years and a fixed coupon rate of 12.0%, received bids worth Kshs 54.4 bn against the offered Kshs 30.0 bn translating to an oversubscription rate of 181.3%, with the government accepting bids worth Kshs 43.5 bn, translating to an acceptance rate of 80.0%, with the average accepted yield coming in at 13.6%. For the month of May, the government accepted a total of Kshs 93.9 bn of the Kshs 111.5 bn worth of bids received in T-Bonds, translating to an acceptance rate of 85.8% compared to an acceptance rate of 98.4% in the month of April;
During the week, the National Treasury gazetted the revenue and net expenditures for the tenth month of FY’2024/2025, ending 30th April 2025, highlighting that the total revenue collected as at the end of April 2025 amounted to Kshs 1,940.4 bn, equivalent to 75.2% of the revised estimates II of Kshs 2,580.9 bn for FY’2024/2025 and is 90.2% of the prorated estimates of Kshs 2,150.8 bn.
During the week, KNBS released the y/y inflation in May 2025 decreased by 0.3% points to 3.8%, from the 4.1% recorded in April 2025. The headline inflation in May 2025 was majorly driven by increase in prices of commodities in the following categories; Food & Non-Alcoholic Beverages, Transport sector and Housing, water, electricity, gas and other fuels by 6.3%, 2.3% and 0.8% respectively;
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Equities
During the month of May 2025, the equities market was on an upward trajectory, with NASI gaining the most by 6.4%, while NSE 10, NSE 25 and NSE 20 gained by 4.9%, 3.6% and 2.2% respectively. The equities market positive performance was driven by gains recorded by large-cap stocks such as Safaricom, KCB Bank and Co-operative Bank Kenya of 17.4%, 9.5%, and 7.6% respectively. The monthly performance was however weighed down by losses recorded by large cap stocks such as Stanbic Bank, Standard Chartered Bank and BAT of 12.9%, 10.5% and 6.3% respectively.
During the week, the equities market registered a mixed performance, with NASI gaining by 0.2% while NSE 10, NSE 25 and NSE 20 lost by 1.4%, 1.2% and 0.3% respectively, taking the YTD performance to gains of 7.1%, 6.1%, 2.2% and 1.6% for NASI, NSE 20, NSE 25 and NSE 10 respectively. The week on week equities market performance was driven by gains recorded by large-cap stocks such as NCBA, Safaricom and KCB Bank of 4.8%, 3.5%, and 3.2% respectively. The performance was however weighed down by losses recorded by large-cap stocks such as BAT, Equity Bank and DTB-Kenya of 13.1%, 11.1% and 5.9% respectively;
Additionally, in the regional equities market, the East African Exchanges 20 (EAE 20) share index gained by 0.6% to 100.6 from 100.0 recorded the previous week, attributable to gains recorded by large cap stocks such as NMB Bank, Bralirwa Limited and Safaricom of 5.6%, 4.9% and 3.5% respectively. However, the performance was weighed down by the losses recorded by large cap stocks such as Equity Bank, Co-operative Bank and Cimerwa Plc of 11.2%, 1.3% and 0.7% respectively.
During the week, Sanlam released the results of its earlier approved rights issue, announcing that the rights were fully subscribed including underwriting with a total subscription rate of 81.5% before underwriting, having received offers worth Ksh 2.0 bn against the offered Ksh 2.5 bn. Sanlam Allianz Africa Proprietary Limited, acquired an extra 92.3 mn shares at a cost of Kshs 461.6 mn in its role as the underwriter (buyer of last resort) in the rights issue. Notably, the Group accepted 402.6 million shares under the entitlement option against the offered 500.0 million, translating to an acceptance rate of 80.5%;
During the week, five of the listed banks released their Q1’2025 results. Equity bank released its Q1’2025 financial results, with its Core Earnings per Share (EPS) decreasing by 3.9% to Kshs 3.9, from Kshs 4.1 in Q1’2024
Absa bank released its Q1’2025 financial results, with its Core Earnings per Share (EPS) increasing by 3.7% to Kshs 1.14, from Kshs 1.09 in Q1’2024;
DTB-Kenya released its Q1’2025 financial results, with its Core Earnings per Share (EPS) increasing by 23.0% to Kshs 11.5, from Kshs 9.4 in Q1’2024.
I&M Group released its Q1’2025 financial results, with its Core Earnings per Share (EPS) increasing by 17.9% to Kshs 2.4, from Kshs 2.0 in Q1’2024.
Lastly, HF group released its Q1’2025 financial results, with its Core Earnings per Share (EPS) decreasing by 89.3% to Kshs 0.1, from Kshs 1.3 in Q1’2024, mainly on the back outstanding share increase following rights issue.
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Real Estate
During the week, The World Bank recommended exempting Kenyan workers earning below Kshs 32,333 monthly from the 2.75% Social Health Insurance Fund (SHIF) and 1.5% Affordable Housing Levy deductions. This aims to increase disposable income for low-income workers, whose take-home pay has been significantly reduced by these levies and increased NSSF contributions,
During the week, President William Ruto and former Prime Minister Raila Odinga commissioned Phase One of the LAPFUND Makasembo Affordable Housing Project in Kisumu, a significant step in Kenya’s Affordable Housing Programme. This phase, built on an 11.6-acre site, delivered 910 housing units: 180 one-bedroom, 100 two-bedroom, and 290 three-bedroom low-cost units, plus 600 two-bedroom and 700 three-bedroom middle-cost units, with 1,754 parking spaces,
During the week, the Purple Tower, a 14-storey mixed-use development along Mombasa Road in Nairobi, was officially opened, marking a historic moment with Kenya’s first-ever drone light show. Developed by Purple Dot International, this eco-friendly skyscraper, located near the Melili/Mombasa Road junction and Jomo Kenyatta International Airport, integrates Grade A office spaces, showrooms, and retail areas across 197,800 square feet, including 12,330 square feet of showroom space and 8,306 square feet of restaurant space,
On the Unquoted Securities Platform, Acorn D-REIT and I-REIT traded at Kshs 26.7 and Kshs 22.9 per unit, respectively, as per the last updated data on 23rd May 2025. The performance represented a 33.4% and 14.5% 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 23rd May 2025, representing a 45.0% loss from the Kshs 20.0 inception price. The volume traded to date came in at 1.2 mn shares for the I-REIT, with a turnover of Kshs 1.5 mn since inception in November 2015.
Click the link below to read the Cytonn Weekly report https://cytonnreport.com/research/cytonn-monthly--4
