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This research report was prepared by the Research Department of Old Mutual Securities Limited. Old Mutual Securities Limited is a securities trading company licensed by the Capital Markets Authority (Kenya) for the purpose of facilitating trade on the Nairobi Securities Exchange.

Here are our views on the news making headlines today for Kenya:
The top-five foreign mutual funds investing in Kenya have seen their returns decline by an average of 11 per cent year-to-date, a new report by consultancy PricewaterhouseCoopers shows. Investor returns have taken a hit from the negative returns in the equities market, while a weaker shilling has simultaneously eroded the dollar returns as they get fewer dollars per shilling on exiting their portfolios.

Our View: Most of foreign investors have opted to cut don their losses in favor of the US market. As the US economy continues to improve, there are heightened expectations of interest rate hike next month in order to contain the inflation rates below the government target of below 2%. The capital outflows along strong dollar remain key concerns in emerging markets hence this could lead to a prolonged bleeding on the local capital market.
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