Kenya offshore investments performance update

Offshore investments in Kenya have seen a positive performance in 2024, reflecting a mixed yet promising landscape influenced by both domestic and global economic trends. Bill Nandwa, Portfolio Manager at Kuza Asset Management, shared his insights on the recent developments in the investment industry. The offshore segment has shown significant growth, with various opportunities emerging for investors. Gold prices have performed well, despite experiencing a decrease of around 29% year-to-date. On the other hand, oil prices have remained relatively stable due to geopolitical shocks and supply issues. Looking ahead, there are promising prospects for offshore investments in the coming year. The shift in monetary policy by the Central Bank of Kenya has also impacted investor behavior towards offshore assets. The bank's move to loosen monetary policy earlier in the year led to a shift in interest rates and a growing interest in alternative asset classes in other regions. European and U.S. equities have been particularly attractive, along with investment opportunities in Egypt and Nigeria. As interest rates decline and investment options in Kenya become limited, offshore investments present a compelling option for investors in the future. In response to currency depreciation concerns, investors have explored currency forwards to hedge against potential risks. While the Kenyan shilling remained stable against the dollar in the second quarter of the year, the expectation of depreciation in the near future suggests an increased utilization of currency forwards in the upcoming year. Additionally, Kenyan investors have shown interest in exploring different investment products, including MANSA X and CMA approved options. These products have performed well compared to traditional local investment vehicles, offering competitive returns and diversification. Despite local instruments performing strongly in 2024, offshore options are expected to outperform in the future, particularly in the equity markets. Global economic trends are also playing a significant role in shaping the returns on offshore investments. As the world navigates through post-pandemic recovery, governments are expected to adopt expansionary policies to stimulate economic growth. Central banks are likely to ease policies, leading to increased government spending and improved business conditions. In the short term, investors can anticipate a shift towards supportive monetary policies and government spending to boost equities and bond markets. Looking ahead, oil prices are expected to face pressure due to increased U.S. supply, which could spur economic activity and present opportunities for investors moving forward. In conclusion, the outlook for offshore investments in Kenya is optimistic, driven by favorable global economic trends and opportunities for investors to capitalize on various asset classes in 2025.