CIC ASSET MANAGEMENT LTD - CICAM

CIC MONEY MARKET

Fact Sheet September 2019

Key Features
Fund Manager CIC Asset Management Ltd Who should invest? Security: The fund invests in government paper and
Lunch Date June - 11 Investors who are seeking ; liquid instruments.
Risk Profile Low Capital preservation whilst not seeking long-term
Trustee Kenya Commercial Bank capital growth Competitive Returns: Interest is calculated daily and
Custodian Co-op Custodian Services A high degree of capital stability and who are credited at the end of each month. As an institutional
Auditors Enerst & Young strictly risk avers client, the fund benefits from placing deposits in large
Minimum Investment: Ksh 5,000.00 A short term parking bay for surplus fund sums and as such is able to negotiate for competitive
Minimum Additional investment Ksh 1,000.00 particularly in times of market volatility rates.
Initial Fee Nill
Annual management Fee: 2.0% Professional fund management: prospective investors
Key benefits
Effective Annual Yield 9.44% benefit from the expertise of our seasoned
Distribution Monthly professionals.
Liquidity: The client is able to withdraw their funds at
short notice with no penalty fees.
Market Commentary
GDP: The economy grew by 5.6% in Q2’19; a decline Flexibility: The client is able to switch or transfer funds
from 6.4% in Q2’18 but still a decent shot above to another fund that he/she may have with
Sub-Saharan Africa averages attributable to a weaker CICAM.
performance in agriculture and related agro processing
activities. The key farming sector as well as that of
electricity and water supply were mostly hampered by a Fund Performance
CIC
delay in the onset of long rains. The government
16.00%
remains optimistic with full year growth forecast of 6%, 91-day T/bill
to be supported by a resilient services sector, big 4
14.00%
expenditure and robust bookings in the tourism sector. 13.45%

Concerns however abound over the alleged diversion of

public resources and weak private sector credit growth 12.00% 11.52%

which has hurt local consumption and lowered revenue

collections by Treasury. We are less optimistic and 11.00%
10.34%
project growth to come in at 5.6% in FY19. 10.05%
10.00% 9.71%
Exchange rates: The currency weakened by 2.03% in 8.49%
8.37%
9.36%
Q3’19 to the greenback. This is attributed to the
8.00% 7.74%
heightened liquidity in the market, with the central
6.45%
bank quite active in the repo market over the same
6.00%
period. We expect the shilling to trend in the 103-104
levels in Q4 as forex reserves (currently at 5.75 months
import cover) present an adequate cushion for the local 4.00%
unit in the short term and have been relatively sturdy as
highlighted by the normalized reserves. Additionally, 2.00%
the bearish policy sentiments by the US Fed should
2015
soften pressure on the KES. 0.00%
2015 2016 2017 2018 Q3 2019
Inflation: The cost of living measure declined to average
5.03% in Q3’19 from 5.9% in Q2’19; with food prices
contained. Oil prices witnessed a surge in September
Asset Allocation Demand Deposits
following drone attacks on two Saudi Arabian oil plants, 3.34% Fixed Deposits
reportedly cutting down circa 6% of the global oil Cash & Net Settlement 21.22%
0.44%
supply. Overall, we expect inflation to oscillate within
Commercial Paper
the government target range, with food and fuel 1.43%
pressures constrained.

Interest rates: The MPC held the CBR rate at 9% in

September, and signaled sustained accommodation
backed by well anchored inflation and healthy forex Corporate Bonds
2.21%
reserves. Interest rates across the curve have sustained
CBK Bonds
the downward bias. The current rate cap controls 1.61%
restrict liquidity to businesses as banks divert surplus
deposits to government securities amidst persistent
risk aversion. We expect interest rates to decline further
due to an evident slack in domestic debt appetite by the
Treasury who will continue to reject expensive bids.

Outlook: The average return on the fund was at 9.36%

as at Q3’19. Rates on short term treasuries continued on Treasury bills
their downward trend as maturities increased, raising 69.74%
liquidity in the money markets. We expect a slight
Statutory Disclaimer: The value of units may go down as well as up and past performance is not necessarily a guide to the future. There are no
increase in rates in the short term as the government guarantees on the client’s capital as the performance of units in the fund is determined by changes in the value of underlying investments
borrows more from the domestic market early in the hence value of your unit trust investment.
year to absorb the liquidity. However, in the medium
term, this borrowing will slow down thus lowering the
return