Defined Benefits (DB) Asset Allocation as at 30th September 2017

 

Defined Contributions (DC) Asset Allocation as at 30th September 2017

Investment updates as at 30th September 2017
Economic Growth
The economy is estimated to have expanded to 5.0% in the second quarter of 2017, which was lower than the 6.3% growth in the same quarter of 2016. This growth was however higher than the 4.7% recorded in quarter one 2017. The driver of this growth was mainly in the agriculture, manufacturing, electricity & water supply, and financial & insurance sectors.


Inflation
Inflation decline in last month of the quarter to 7.06% which was within the upper band of the Central Bank of Kenya range of 2.5%-7.5%. This decline was attributable to food prices which eased in the third quarter as food inflation averaged 12.6% compared to 19.4% in the previous quarter.

 Foreign Exchange
The Kenya Shilling appreciated by 0.4% against the US dollar to close at 103.25 in the third quarter of 2017. It however depreciated against other major currencies losing 2.98% and 2.8% to the sterling Pound and Euro respectively. In the regional front, it strengthened against Tanzanian shilling, Uganda Shilling and Rwanda Franc by 0.81%, 0.87% and 1.36% respectively.

Equity Markets
During the third quarter, the Kenyan equity market remained resilient with indices registering upward trend. The NASI, NSE 25 and NSE 20 gained 6.1%, 4.9% and 4.0 % respectively during the quarter.

Fixed Income Market
Interest rates for the various short-term government securities registered a mixed performance during the quarter. The rates for the 91 days and 182 days decreased to 8.14% and 10.31% from the 91- day, 182 from 8.28% and 10.33% in June 2017 in June 2017. While the 364-day slightly gained to close the quarter at 10.96% from10.90% in June.
The Central Bank of Kenya maintained the policy rate at 10.0% at the Monetary Policy Committee meeting in September 2017 but raised concerns about the impact of the interest rate caps on credit growth.