ICEA LION Asset Management, East Africa’s pioneering investment management firm, has released the Fourth Quarter 2025 edition of the ILAM Investor Pulse under the theme “Investing Ahead of the Curve.”
Speaking during the launch, Gerald Gondo, Group Chief Investment Officer at ICEA LION Group, shared key market insights, highlighting the impact of ongoing global events and the outlook for Kenya’s economy.
Global Context: Slower Growth, Diverging Policies
Global growth continues to moderate amid uneven recovery and persistent trade tensions. Central banks are increasingly diverging in policy stance: while advanced economies are cautiously easing, many emerging and frontier markets—including Kenya—are maintaining positive real interest rates to preserve price stability, support external buyers, and sustain foreign capital inflows.
This deliberate stance reflects an effort to balance inflation control with the need to attract investment amid tight global financial conditions and uneven capital access.
Kenya’s Outlook: Credit Expansion and Stability;
Kenya’s economy remains resilient, with growth projected at 5.2% in 2025, supported by a rebound in agriculture, a vibrant services sector, and improving credit conditions.
The Central Bank’s recent 25-basis-point rate cut to 9.25% reflects confidence in contained inflation—currently 4.6% and within target—and marks a measured shift toward stimulating private sector activity.
Kenya’s policy credibility and diversified economy continue to distinguish it regionally, anchoring investor confidence and positioning the country to benefit from an improving global outlook.
This credibility was reaffirmed in 2025 when Central Bank Governor Kamau Thugge received an “A” grade from Global Finance magazine,
recognising his leadership in inflation control, currency stability, and policy independence.
Stellar stock market driven by higher demand
The Nairobi Securities Exchange (NSE) performance has remained strong with attractive valuations.Foreign and local demand has remarkably improved this year due to currency stability and lower fixed income returns.
Looking Ahead
Monetary easing amid stability creates a rare window for investors to anticipate value rather than chase it,” said Gerald Gondo, Group Chief Investment Officer at ICEA LION Group.
“The opportunity lies in positioning early—across fixed income, alternative investments and select equities—to capture the next leg of growth through greater portfolio diversification.”
He noted that ILAM’s fixed income portfolios are well placed to benefit from duration extension and gradual yield repricing, while equity valuations remain compelling, supported by resilient earnings and strong dividend yields.
“Sustainability is no longer an abstract concept—it is a practical investment lens that strengthens both financial performance and societal impact.
As markets evolve, our focus is to help investors anticipate value rather than react to it—building portfolios that are sustainable, diversified, and positioned for long-term growth.”
During the same event, ICEA LION Asset Management also released the Q3 2025 ILAM Consumer Spending Index, which tracks consumer spending as an indicator of real economy trends.
The index draws data from interviews with approximately 1,200 consumers and over 200 retail businesses across major urban centres in Kenya. Judd Murigi, Head of Research at ICEA LION Asset Management, presented key findings from the index:
Higher quality of consumer spending
One third of consumers surveyed attributed higher spending to more purchases (rather than higher prices of goods) compared to one quarter of consumers in the second quarter of 2025.
Incomes trends stagnate
Half of respondents indicated that their income remained flat in the third quarter of 2025 compared to the same quarter in 2024. This was the highest level of stagnant income growth recorded this year.
For the second successive quarter, Eldoret had the biggest proportion of respondents stating that their incomes had risen over the past 12 months, while Mombasa had the most individuals reporting lower incomes over the same period.
In terms of income categories, the upper middle class and high income segments had the largest proportion of respondents recording better incomes over the past year while the low income segment had most individuals indicating that their income was lower in the third quarter of 2025 compared to a similar period in 2024.
Savings and investments nudge upwards
There was a marginal improvement in the proportion of income allocated to savings, investments and insurance, with SACCOs, commercial banks and chamas strengthening their grip on investments.
Retail sales trends rebound
• Over 60% of retail businesses surveyed reported higher sales between June and September compared to the third quarter of 2024. This marked the second year in a row that retail sales trends rebounded in the third quarter.
• For the third quarter in a row, sales increases were mainly attributed to higher customer numbers,
rather than price hikes.
• In terms of sectors, retail stores had the most improved sales trends compared to the same period in
2024, even as all other retail business sectors recorded improved sales trends.
• Nakuru and Mombasa had the highest proportion of retail businesses recording higher sales during the quarter, while Nyeri had the highest number of retail businesses with lower sales.
Highlights from the Q3 2025 ILAM Consumer Spending Index:
We’re Better Together
ILAM Consumer Spending Index picks up pace
The index rose by 9% compared to Q3 2025 driven by a rebound in retail sales trends. In his closing remarks, ICEA LION Asset Management CEO Einstein Kihanda, who is also the immediate former Chairman of the Institute of Certified Investment and Financial Analysts (ICIFA), noted:
“Investors who position their portfolios to take advantage of the prevailing environment stand to benefit
the most”
