FUND PERFORMANCE -DC

The fund has been on a steady growth each year since 2013.

OUTLOOK

Economic growth in 2022 is expected to continue with recovery supported by increased growth in the transport, accommodation, manufacturing, education and Information, Communication and Technology (ICT) sector.

The CBK and IMF project an estimated growth of 6%. The upcoming elections in Kenya and the ongoing COVID -19 pandemic however pose a threat to the 2022 growth projections.

The dollar is expected to strengthen against most currencies including the Kenya Shilling which is expected to experience downward pressure due to higher oil prices, increased imports demand, pressure from debt repayments and weak tourism flows.

Investors should prepare for higher inflation rates to exceed CBK’s upper target of 7.5% as the ongoing drought continues to bite and the oil prices continue the upward trajectory buoyed by the Russian, Ukraine war.

Overall interest rates are expected to gradually increase in the short term as a result of higher government domestic borrowing and potentially lower liquidity in the market. The key risk to this outlook is that the government could access cheaper foreign denominated borrowing which could reduce its appetite for domestic debt.

Equities reported volatilities in 2021 and going forward in 2022, continued vaccinations and control over the pandemic could reduce future disruptions and support private sector performance. The earnings are however expected to remain modest as investors take a wait and see attitude regarding the 2022 general elections.

Globally there are concerns that financial markets are likely to experience more volatility increased inflationary pressure, rising interest rates and ongoing disruption to the international supply chain caused by emerging COVID 19 variants and the Russian, Ukrainian war.