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Britam Imarika Fund Commentary 31 March 2019

Markets Review

  • Annual inflation stood at 4.35% in March 2019, up from 4.14% in February 2019. This was mainly as a result of an increase in the Food and Non-Alcoholic Drinks’ Index which grew by 3.3%. Drought conditions in parts of the country led to the increase in prices of certain food items.

  • Short-term interest rates as indicated by the 91-Day, 182-Day and 364-Day Treasury bill rates showed mixed movement in March 2019. The 91-Day rose by 0.54% to close March 2019 at 7.50% from February’s close of 6.96%. The 182-Day rate declined by 0.17% to close at 8.20%, compared to 8.38% recorded as at close of February 2019, while the 364-Day dropped by 0.08% averaging 9.41% from February’s close of 9.49%.

  • The Central Bank of Kenya (CBK) left the benchmark interest rate unchanged at 9.0% in the March 2019 Monetary Policy Committee (MPC) meeting. The CBK noted that inflation and overall macroeconomic outlook remains stable. The benchmark interest rate sets the tone for commercial interest rates in the country. Commercial interest rates on loans issued by banks are now capped at 14.0%.

  • Fixed Income market interest rates fell slightly in March 2019, shedding an average of 0.15%. The Central Bank of Kenya (CBK) aimed to raise KES 50Bn through an offer of IFB1/2019/25 in the March 2019 primary auction. The bond has a coupon rate of 12.200%. Bids received totaled KES 29.376Bn at a weighted average rate of 12.834%. The CBK accepted KES 16.303Bn at a weighted average rate of 12.655%.

  • Equities market as shown by the Nairobi All Share Index (NASI) rose during the month; the NSE All Share Index gained 5.1 points in March 2019 to close at 157.66 points. The NSE All Share Index is up 12.3% year-to-date. The NSE-20 index shed 47.85 points to close the month at 2,846.35 points. The NSE-20 index year-to-date return is flat at 0.004%.

Imarika Fund Performance

Return for the month was 1.10%. The Funds annualized year-to-date return stands at 13.73% p.a.

Outlook and Strategy

Our strategy is aimed at achieving performance that is sustainable in the long-term. We aim to achieve this by taking guided investment decisions. To preserve capital, manage risks and drive portfolio returns, we target a well-diversified and balanced asset allocation. With carefully selected and diversified securities, we can maximize risk-adjusted returns and ensure market beating returns.

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