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- Return on Top Passive Income Investments Soars Past 20%
Return on Top Passive Income Investments Soars Past 20%
In this week’s highlights we have: high returns on an infrastructure bond, Mansa-X’s impressive performance, and new taxes raising the cost of essentials. Plus, insurance withdrawals hit Ksh13 billion, satellite internet providers face high fees, and retirement savings just got a boost!
Greetings and welcome to the First Money Weekly Roundup of 2025!
This week, investors in a 6.5-year infrastructure bond issued in December are celebrating impressive returns of over 21%, signaling strong demand for long-term debt instruments in Kenya’s financial markets. In addition, Standard Investment Bank’s Mansa-X fund delivered an outstanding net return of 19.53% for the year ended December 2024
Meanwhile, the Insurance Regulatory Authority (IRA) has revealed that Kenyans withdrew a record Ksh13 billion from their insurance policies, marking a 2.5-fold increase from the previous year. This surge in withdrawals highlights growing financial pressures, as rising living costs and inflation cause more people to cash out their policies.
As always, we’ve included some of our favourite personal finance articles in our Finance Tips section below.
Let’s dive in.
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NEWS RECAP
What happened this week
Investors in a 6.5-year infrastructure bond issued in December enjoyed returns exceeding 21% from the secondary market.
The bond, which had a face value of Ksh100, has proven lucrative due to its attractive yield, underscoring the strong demand for long-term investment instruments in Kenya's debt market.
Standard Investment Bank (SIB) announced its Special Fund, Mansa-X, delivered a 19.53% net return to investors for the year ended December 2024. The fund had a gross return of 24.53% making it one of the highest-performing passive income investments in the market.
Mansa-X is a multi-asset fund which has both Kenyan shilling and dollar denominated investments under the regulatory oversight of the Capital Markets Authority (CMA). The Mansa X Dollar Fund recorded for the same period a 12.50% net return.
Insurance policyholders in Kenya withdrew Ksh13 billion in 2023, a 2.5x increase from Ksh5.15 billion in 2022, according to the Insurance Regulatory Authority (IRA). While partial withdrawals surged by 55%, policy surrenders dropped by 16%, as customers avoided penalties for abandoning policies.
Rising living costs, mandatory deductions like the National Social Security Fund (NSSF) and National Health Insurance Fund (NHIF), and reduced disposable incomes contributed to the trend. The IRA reports that nearly half of policyholders skipped premiums as inflation and financial pressures intensified.
Satellite internet providers, including Starlink, could soon pay an annual license fee of either Ksh4 million or 0.4% of their gross turnover, whichever is higher, under new regulations proposed by the Communications Authority of Kenya (CA).
The proposal, which also includes a one-time fee of Ksh15 million, seeks to enforce technology neutrality and open the market to diverse satellite technologies. While the changes aim to level the playing field, the higher fees may affect pricing for consumers and shape the satellite internet market's growth in Kenya.
Kenyans face a fresh economic burden as new taxes under the The new Tax Laws (Amendment) Act, take effect. The Act increases excise duties on essential goods such as sugar, which now attracts Ksh7.50 per kilo, up from Ksh5. Significant taxes also target the entertainment sector, with a 15% duty on internet and social media advertisements for alcohol, betting, gaming, and lotteries.
Imported items like ceramic sinks and transformers will face higher excise duties, adding strain to construction and energy sectors. Critics warn of rising costs on basic goods, reduced consumer purchasing power, and slowed economic growth, but the government insists the measures are crucial for addressing public debt and funding services.
🛡️ Retirement Benefits Get a Boost
The new Tax Laws (Amendment) Act is set to benefit Kenya’s retirement benefits sector, encouraging more Kenyans to save for retirement. According to the Retirement Benefits Authority (RBA), the law raises the tax-deductible contribution limit from Ksh240,000 to Ksh360,000 annually, helping individuals save more without significantly increasing their taxable income.
A new provision allows tax-deductible contributions of up to Ksh15,000 monthly for post-retirement medical funds, easing healthcare concerns in retirement. Pension withdrawals for retirees, those withdrawing due to ill health, or after 20 years of membership will now be exempt from income tax. The Act also simplifies fund registration by requiring retirement schemes to register exclusively with RBA, eliminating dual registration with KRA.
📊 NSE Foreign Outflows Drop
Foreign investor net outflows at the Nairobi Securities Exchange (NSE) dropped to Ksh16.5 billion, reflecting reduced sell-offs compared to previous months. The decline signals a potential stabilization in investor sentiment despite ongoing global economic uncertainties.
The subdued outflows coincide with efforts to enhance liquidity and attract more participants to the local market. Listed stocks' performance continues to be monitored closely, particularly those included in the MSCI indices, which often serve as benchmarks for institutional investors.
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MONEY TIPS & TOOLS
This week’s finance tips
Welcome to Money254's Money Tips! Here, we share quick and easy tips that make understanding and managing your money a breeze. We break down the tricky parts of your finances and the financial landscape, making it simple and clear for you. Stay tuned for helpful tips every week.
MONEY254 #MONEYTOK OF THE WEEK
5 Strategies Investors Use to Make Money in the NSE
In today's #MoneyTok, securities in the Nairobi Securities Exchange (NSE). The NSE is the principal securities exchange in Kenya and serves as a platform for buying and selling various financial instruments, including stocks, bonds, and derivatives. Here are some strategies investors use to make money in the NSE. Watch Video.
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That’s a wrap for this week’s Money Weekly!
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Tony and the Money254 editorial team.
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