Collective Investment Schemes (CISes) in Kenya maintained their upward trajectory in the first quarter of 2024, with Total Assets Under Management (AUM) growing by 4.8% to KES 225.36 billion from KES 215.05 billion in the previous quarter, according to the latest Capital Markets Authority (CMA) Quarterly Statistical Bulletin. The majority of AUM remained allocated to Government of Kenya securities, reflecting a continued preference for stable, low-risk investments.
The growth in CISes comes amid a mixed performance in the broader Kenyan securities market. While equity turnover increased by 48.91% to KES 28.39 billion in Q2 2024, the NSE 20 Share Index and NSE All Share Index declined by 5.47% and 3.18% respectively. Market capitalization also decreased by 3.19% to KES 1,710.64 billion.
CMA Chief Executive Officer, FCPA Wyckliffe Shamiah, commented on the economic outlook, stating, “Kenya’s economy is projected to remain resilient in 2024, mainly supported by a robust services sector and strong agricultural performance expected from favorable rainfall. Additionally, a decline in global commodity prices is anticipated to reduce production costs.”
Among individual asset managers, Etica Capital Limited demonstrated the most impressive growth, with a staggering 273% increase in AUM. Other fast-growing asset managers included KCB Unit Trust Scheme (70.7% growth), Lofty-Corban Unit Trust Scheme (98% growth), and GenAfrica Unit Trust Scheme (79.9% growth).
However, not all asset managers experienced growth. British American Unit Trust Scheme saw a 5.3% decline in AUM, while Dry Associates Unit Trust and Genghis Unit Trust Funds dropped by 5.1% and 5.2% respectively.
CIC Unit Trust Scheme maintained its position as the market leader, managing 27.47% of total AUM, despite a modest 2.2% decline. NCBA Unit Trust Scheme and British American Unit Trust Scheme followed, with market shares of 13.88% and 13.33% respectively.
The CMA bulletin also highlighted several major approvals granted during Q2 2024, including the registration of new unit trust funds by Faida Investment Bank, Enwealth Financial Services Limited, and Gulf Investment Bank. These approvals suggest a continued expansion and diversification of investment options in the Kenyan market.
In the primary market for Treasury bonds, the government successfully raised KES 183.55 billion against a target of KES 185.00 billion. However, the secondary bonds market experienced a 29.37% decline in turnover to KES 323.61 billion compared to the previous quarter.
The derivatives market reported mixed results, with a 44.66% decrease in deals and a 16.53% dip in turnover. However, traded volume spiked by 135.33% to 746 contracts from 317 contracts in Q1 2024.
As Kenya enters the 2024/2025 financial year, Shamiah emphasized the opportunity for market stakeholders to “work towards a common goal of creating an enabling environment that would spur investments in Kenya.”
