Cytonn Investments has today released their 2019 Markets Outlook, which projects GDP growth for 2019 to come in between 5.7% to 5.9%, driven by the recovery of the agriculture sector and growth in the tourism, real estate and manufacturing sectors. “Our outlook for Kenya’s macroeconomic environment is POSITIVE, supported by expectations for strong economic growth at between 5.7%-5.9%, a stable currency, inflation rates within the government’s target, and stable interest rates in 2019. This conducive operating environment should support investments in the Equities market and Private Equity activity, where we have a Positive outlook in both asset classes, owing to the attractive valuations,” said Caleb Mugendi, Senior Investment Analyst at Cytonn. “We also expect monetary policy to remain accommodative and political stability in 2019. However, worries about Kenya’s debt sustainability, and the revenue collection capacity by the Kenya Revenue Authority against its Budgetary targets, have led to a build-up in short term risks, thus our view is that investors should be biased towards Medium Term Fixed Income Instruments,” added Caleb.
“Our outlook for Real Estate is NEUTRAL, as the slowdown in demand for property persists amid increasing supply. We expect a positive performance in sectors like Mixed Use Development, Land and Hospitality, and a negative performance in the Commercial Office sector and Listed Real Estate,” said Juster Kendi, Research Analyst at Cytonn. “In 2019, we expect the Real Estate sector performance to be shaped by focus on affordable housing, increased mortgage uptake and adoption of sustainable developments and technology. We note that the Real Estate sector is mainly constrained by high financing cost for both developers and off takers, and we expect the market to pick up should the interest rate cap be lifted, or should the government establish other financing methods such as tapping into capital markets and incentives for the mortgage market,” added Juster.
Below is a Summary of the 2019 Markets Outlook:
Key: Green – POSITIVE, Grey – NEUTRAL, Red – NEGATIVE
Cytonn Investments is an independent investment management firm, with offices in Nairobi – Kenya and D.C. Metro – U.S. We are primarily focused on offering alternative investment solutions to individual high net-worth investors, global and institutional investors and Kenyans in the diaspora interested in the high-growth East-African region. We currently have over Kshs 82.0 billion of investments and projects under mandate, primarily in real estate.