Regal Report 22nd Issue Q2 2019

REGAL REPORT WEALTH NEWS

22 ND ISSUE:2ND QUARTER REPORT 2019

PURPOSE INVESTING THE BENEFITS OF SIGNING THE AFRICAN CONTINENTAL FREE TRADE AGREEMENT (ACFTA)

OUR TRANSACTION ADVISORY SERVICES ARE UNMATCHED.

Regal Africa Consulting Group is a boutique Investment Advisory and Management Strategy firm, that offers Transaction advisory and Strategic advisory services in East Africa.

We are an independent firm with a network of investors, lending institutions and other partners,which helps us provide the most optimal cost of capital for our clients. We work with highly scalable businesses to plan for and acheive growth. This always requires a customized approach - we tailor our work based on individual business requirements in order to achieve the best results in the most cost effective way.

We ensure that our financial and strategy recommendations are based on the best options in the market.

Mergers & Acquisitions Capital Raising Corporate Restructuring Company Strategy & Innovation Market Research & Analysis Executive Training Regal Africa Group 4th Floor Top Plaza, Kindaruma Rd, Nairobi, Kenya P.O. Box 40187, Nairobi 00100 Tel: +254 0714 009 065 www.regalafrica.co.ke info@regalafrica.co.ke

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Words from the C.E.O. Money Market Analysis Equity Market Analysis Balanced Funds Analysis The benefits of signing the African Free Trade Agreement Purpose Investing by EastGold

Report Created BY: D.Gaitha Creative Studio www.dgaitha.com

WORDS FROM THE C.E.O Dear Regal Client, The Regal Africa team is excited to celebrate our four (4) year anniversary. When we started this journey in 2015, our goal was to assist our clients to create wealth for themselves and their families.

As we have grown over the years, we are glad to have impacted our clients lives and the communities we serve.

As the CEO of the Regal Africa Group, I can assure you that we are constantly working to help YOU Plan, Manage and Grow your Wealth and attain your financial freedom. This is our mission and promise. We recently launched our EastGold brand that uses technology to Inform, Educate and Facilitate the uptake of the best financial and investment products and services in the marketplace.

You can get additional information on our NEW website www.eastgold.co.ke

“Wealth is the ability to fully experience life.” Henry David Thoreau Are you currently on your Wealth Journey ? Talk to one of our Wealth Advisors at info@eastgold.co.ke and we will assist you to start “Creating Golden Wealth” and enjoy having a Purpose Driven Life by investing in our #GoldenPurposeInvesting program.

Anne Wambui Gaitha

Founder and CEO of Regal Africa

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Q2 2019 MONEY MARKET ANALYSIS Money market yields continued with their declining trend in the second quarter of 2019. The average yield for money market funds in Q2’19 declined to 8.65% from 8.84% in Q1’19. The average yield of the money market funds with the highest yield declined to 10.27% from 10.54% in the previous quarter. The decline in yields of money market funds mirrors decline of money market securities yields which have been on a continuous decline for the past three years.

Treasury Bills which are the benchmark for money market securities declined further as shown in the graph below. In the last 12 months, the yield on the 91, 182 and 364 day treasury bills declined to 6.814%, 7.578% and 9.05% from 7.938%, 10.196% and 11.083% respectively. The decline in the Treasury Bills yields has been caused by increased demand by commercial banks as they prefer lending to the government than lending to the private sector due to the interest rate cap.

Those who save through money market funds should expect their yields to decline further as any new funds and maturing investments will be invested at the current lower yields and yields are not expected to go up in the short-term. .

Money Market Funds’ Return in Q2 2019 The graph below shows money market funds return for the 5 best performing funds in Q2 2019

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Money Market Funds Return for the past 6 months.

The graph below shows money market funds return for the 5 best performing funds in the past 6 months.

Money Market Funds Return for the past 12 months.

The graph below shows money market funds return for the 5 best performing funds in the past 12 months.

pg 6 REGAL REPORT 22

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Q2 2019 EQUITY MARKET ANALYSIS The prices of companies listed at the Nairobi Securities Exchange had a notable decline due to the selling that followed dividend closure dates and investors expectation of lower growth in corporate profits due to challenging economic times the country is experiencing.

The Nairobi All Share Index (NAS), NSE 20 and NSE 25 declined by 5.1%, 7.5% and 8.9% respectively in the second quarter of the year.

The drop in prices of stocks affected negatively the return of equity funds. The average return of equity funds in Q2’19 declined to -0.74% from 1.64% in Q1’19. The average return of the 5 best performing equity funds in Q2’19 declined to 1.98% from 7.82% in Q1’19.

Those who invest in equity funds need to understand that they should be in it for the long term, short term deviations as seen in Q2’19 will always occur but over the long term, equity funds tend to outperform money market and bond funds.

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The table below shows the 10 best performing stocks at the NSE year to date;

30/06/2019 7.80 3.07 4.05 28.10 6.20 2.54 199.75 24.5 38.95 30.60

Longhorn Kenya Sameer Africa Trans-Century Safaricom Express Ltd Olympia Capital East Africa Breweries Car & General Equity Group NIC Group

YTD Return 69.20% 65.95% 37.29% 26.58% 24.00% 20.95% 14.31% 13.95% 11.76% 10.07%

The table below shows the 10 worst performing stocks at the NSE year to date;

30/06/2019 3.97 0.34 0.51 500.00 49.00 4.01 117.75 0.88 4.14 11.05

Kenya Airways Mumias Sugar Uchumi Supermarkets BAT Kenya Nation Media Group HF Group Diamond Trust Bank Nairobi Business Ventures National Bank of Kenya WPP Scangroup

YTD Return -55.39% -41.38% -36.25% 31.03% -28.47% -27.62% -24.76% -23.48% -22.18% -21.07%

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EQUITIES FUNDS ANALYSIS Q2’2019 The graph below shows the return of the 5 best performing equity funds in Q2’2019

EQUITIES FUND 6 MONTHS ANALYSIS The graph below shows equities funds return for 5 of the best performing funds in the past 6 months.

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EQUITIES FUNDS 12 MONTHS ANALYSIS The graph below shows equities funds return for 5 of the best performing funds in the past 12 months.

Q2’2019 BALANCED FUNDS ANALYSIS Balanced funds which have a mix of money market securities, fixed income bonds and equities saw their average performance decline in Q2’19 as a result of poor performance of equities and also due to lower yields on money market and fixed income bonds.

The average return for Balanced funds declined to -0.74% in Q2’19 from 1.64% in Q1’19, also the return of the top 5 balanced funds also declined to 2.74% from 5.88%.

Just like equity funds, those who invest in balanced funds should have a long term investment horizon as they mix long term bonds and equities with short term money market securities and hence investors should not be worried very much by periodical declines in their returns.

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The graph below shows balanced funds returns for 5 of the best performing funds in Q2’2019

BALANCED FUNDS 6 MONTH ANALYSIS The graph below shows bond funds return for the past 6 months.

pg 11 REGAL REPORT 22

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BALANCED FUNDS 12 MONTH ANALYSIS The graph below shows bond funds return for the past 12 months.

pg 12 REGAL REPORT 22

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THE BENEFITS OF SIGNING THE AFRICAN CONTINENTAL FREE TRADE AGREEMENT (ACFTA)

By Anne wambui Gaitha

I believe that the African Continental Free Trade Agreement (AcFTA) is a game changer in international trade and will be an amazing opportunity for African brands. Traditionally the trade flows in Africa have revolved around exporting raw materials to Europe and the Far East and then importing value added products from global trade partners, this has not benefited many African businesses especially the SMEs as they have not been able to compete with the multinational companies. I think ACFTA will now give SMEs who are the engines of economic growth, the opportunity to reach the huge African market of over 1 billion citizens.

The signing of the AcFTA was the first step in opening up borders where the flow of African goods and services will happen with other African states, but more work needs to be done to create continental focused infrastructure like the LAPPSET project which connects Kenya, Ethiopia and South Sudan.

Beyond road and rail infrastructure which will create jobs and wealth for the African businesses that are given this opportunity for construction, I believe we will begin to see the connectivity happen in the Financial Service industry i.e. banking, capital markets, payments, investing e.t.c. I do see many African businesses who are in the Financial services, Logistics and Tourism industry becoming more continetal brands as they are able to provide local interconnected solutions, linking one African state to the other.

I single out the Financial Services, Logistics and Tourism industries because for the AcFTA to succeed we will need to see more innovation in trade finance and payments and that is where we will be able to see the development of African regional/continental currencies, African Crypto currencies, Block Chain solutions around smart contracts and the rise of the capital markets where more and more African businesses will be able to raise capital or exit their business investments as envisioned.

Businesses in the logistics industry will benefit because of the rise of more goods being transported and the rise of e-commerce based on the youth who are able to purchase goods and services from anywhere in the world 24/7. Tourism will also be a major beneficiary of the AcFTA because as more jobs are created on the continent, you will have more business people travelling from one state to another for business and experiencing Africa as a whole and in the case of leisure travel more Africans will have more disposable income which will allow them the luxury to travel and explore the continent. These are just some of the industries that I believe will benefit highly from the AcFTA, but I know based on the huge developmental needs on the continent, all business owners on the continent will be able to benefit from the AcFTA which has removed some of the barriers that businesses looking to expand continentally have faced previously. pg 13

Continued from page 13 With the signing of the AcFTA we will see more African corporates emerging as they will be able to take on an expansion strategy that other global companies would be reluctant to take based on them not understanding the different African cultures. I see this opportunity as been a great benefit to more African businesses who are SMEs, as they are able to position themselves as part of the supply chain of a large African Corporate and thus have the ability to reach a larger market beyond borders while only dealing with one partner. For example Tusky’s which is a Kenyan brand that is a supermarket in the retail trade industry, has continued to expand from the Kenya market to the East African market. For example if Tusky’s ever plans to expand continentally, then a SME business that supplies Tusky’s will now be able to have a presence in other African countries by partnering with such a continetal wide partner.

AcFTA has brought about the Pan African spirit that was last seen when Africans were fighting colonialism and asking for independence in the 1950’s and 1960’s, this pan african spirit will see more than 1 Billion African consumers beginning to think “Buy Africa, Build Africa”, with this kind of loyal clientele, it will ensure that African businesses are put to the task to provide high quality, easily accessible and affordable goods and services that fit the African consumer.

The future benefits i for see for African businesses that are presented by the signing of the AcFTA is more standardization of products which makes it easier for businesses to sell their products without having to customize for each African state, I also see more jobs created because Africans will be able to serve a larger market size which improves business performance through economies of scale.

The benefits the AcFTA are endless and will be the start of the eradication of poverty on the African continent, as governments, business owners and the population focus on Trade and not AID. Anne Wambui Gaitha C.E.O. at the Regal Africa Group

THE EASTGOLD online academy IS HERE www.eastgold.co.ke

eastgold ONLINE ACADEMY

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EASTGOLD do you know regal diaspora services?

THE ULTIMATE FINANCIAL MARKETPLACE FOR YOUR INDIVIDUAL & BUSINESS NEEDS

EastGold is a subsidiary of the Regal Africa Group. East Gold’s mission is to use technology to Inform, Educate and Facilitate the uptake of the best financial and investments products and services in the marketplace.

EastGold Financial Services Top Plaza, 4th Floor Kindaruma Rd, Nairobi, Kenya P.O. Box 40187, Nairobi 00100 Tel: +254 0714 009 065 www.eastgold.co.ke info@eastgold.co.ke

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Regal Africa Financial Services Ltd. Top Plaza, 4th Floor, Kindaruma Rd, Nairobi, Kenya P.O. Box 40187, Nairobi 00100 Tel: +254 0714 009 065 www.regalafrica.co.ke info@regalafrica.co.ke

PURPOSE INVESTING BY EASTGOLD

BY ANNE WAMBUI GAITHA

I believe that we should all be living a life of purpose and working to achieve what you envision as a great life and lifestyle to have. We at EastGold would like to introduce our EastGold Investment Program #GoldenPurposeInvesting At EastGold we work with our clients to save/Invest for a specific purpose. Once you set up a financial goal, we work towards assisting you to open up the right financial instrument with our strategic financial partners who are licensed fund managers by the Capital Markets Authority of kenya.

Since the savings are for a specific purpose and most investors are looking to ensure that they make some interest and that their principal is not affected by the fluctuations in the financial markets, then we recommend saving periodically in a money market fund.

Some of our clients have started saving specifically in this investment programs

#GoldenHome - Goal to purchase a home or a piece of land to develop

pg 17

Continued from pg 17 #GoldenWedding - Goal to save for your Dream Wedding

#GoldenChild - Goal to open a savings account for your child to learn the savings culture from a young age.

#GoldenTravel - Goal to save for your Dream Vacation

#GoldenBusiness - Goal is to save funds to start your dream business or side hustle

A money market fund is the best place to keep your savings, you can deposit anytime through mpesa or bank deposit and not only are your funds liquid (you can withdraw and get the funds in your bank account in 2-4 days depending on the fund manager) The money market funds are also not accessible through an ATM like a savings account, therefore the chances of using the funds for impulse buying is reduced. The best thing about the money market funds, is that even though it is liquid, it gives you a much higher return that regular savings accounts and is more flexible and most likely has better interest than a fixed income account at your bank.

BENEFITS Security: The Money Market fund has capital guarantee and the funds are held in custody by a licensed custodian bank and are thus separated from the fund manager who manages the investments.

Efficiency: Quick and easy access to funds when needed.

Interest: Interest is compounded and is calculated on a daily basis and statements sent to you monthly.

Flexibility: The period to invest is not fixed or contractual.

Top ups: Investor can top up anytime as they wish and we recommend 10% contribution monthly if you are a salaried employee and for those who are self employed, we recommend you to invest at least 10% of your compensation.

Professional managed: The professional money managers are able to negotiate better terms than you and they are then able to transfer the better returns to the unit holders of the money market fund.

Performance: Historically the money market funds have performed better than banks short term savings offerings.

We recommend that you speak TODAY to one of our Wealth Advisors at EastGold at info@eastgold.co.ke or call 0714009065 and you can start saving purposefully to achieve your DREAMS pg 18

LETS HELP YOU PLAN FOR YOUR FUTURE

TM

GrowPesa100 is an innovative financial product byEast Gold. This financial solution is great for the youth and people in the informal economy, who are able to put aside funds daily to start on their wealth journey.

By setting aside money as low as 100/day, we are able to assist our clients to get an investment account, a personal pension fund and enroll in an insurance plan.

Option 1 - Invest in a money market fund Option 2 - Invest in a money market fund + personal pension plan Option 3 - Invest in a money market fund + personal pension plan + Insurance (NHIF) Talk to one of our Wealth Advisors TODAY to start investing for your future

CONTACT US TODAY!!!

Regal Africa Group Top Plaza, 4th Floor Kindaruma Rd, Nairobi, Kenya P.O. Box 40187, Nairobi 00100 Tel: +254 0714 009 065 growpesa@eastgold.co.ke

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WELCOME TO THE BESPOKE REAL ESTATE SERVICE EXPERIENCE

Regal Africa Properties is part of the Regal Africa Group and is a company that offers Real Estate services in East Africa from its head office in Nairobi, Kenya.

We focus on finding great opportunities in the Real Estate industry and we have demonstrated experience in advising clients on real estate opportunities, which requires practical experience and an intimate knowledge of what works in East Africa

Top Plaza, 4th Floor Kindaruma Road, Nairobi,Kenya P.O. Box 40187 -00100, Nairobi, Kenya Phone: +254 0714 009 065 Email: properties@regalafrica.co.ke www.regalafrica.co.ke/properties

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CONTACT US TODAY! Invest in your Home Country Invest in your Family Invest in your Community Regal Africa Group is a diversified Financial Service Group that offers Financial Services, Advisory and Real Estate services to Individuals, Businesses and Institutions. We are based in Nairobi, Kenya to help our global clientele to achieve their financial goals.

We offer unrivalled financial solutions that focus on the Kenyan/Africa Diaspora with a goal to assist them to invest and get great returns. RegalDiaspora is our diaspora financial services product, that is offered to AtKenyans/Africans Regal africa we believe that Good Health is the most important thing a person can have . Good health goes a who reside outside the country. long way in helping an individual on their wealth creation journey #HealthyUWealthyU. Regal Africa would like your trusted partner our goalwhere is to beyou the can go toeasily firm for the diaspora the ground, ensure toAsintroduce youfinancial to an online platform generate quotesonfrom the topto20 insurance that our clients achieve their investment and financial goals. companies in Kenya.

Our services but not limited to:your loved ones and we will assist you in taking care of your financial Take care of include your health and that of Investments success . Talk to one of our wealth advisors today at insurance @regalafrica.co.ke or call 0714 009 065 for Banking and Insurance more assistance.

Wealth Management Real Estate services

Regal Africa Financial Services Ltd. Top Plaza, 4th Floor Kindaruma Rd, Nairobi, Kenya P.O. Box 40187, Nairobi 00100 Tel: +254 0714 009 065 www.regalafrica.co.ke info@regalafrica.co.ke

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WE ARE THE BEST IN CUSTOMIZING A WEALTH MANAGEMENT PLAN TAILORED FOR YOU

Regal Africa Wealth Management provides financial planning , wealth advice to individuals, families, family offices and businesses. We offer a high touch, high quality and customized service.

We believe that finding the right wealth adviser is critical to attaining your lifetime financial plan. Our aim is to help our clients to make the right financial decisions to attain their financial and investment goals as we assist them to plan, grow and manage their wealth.

Regal Africa Group Top Plaza, 4th Floor Kindaruma Rd, Nairobi, Kenya P.O. Box 40187, Nairobi 00100 Tel: +254 0714 009 065

www.regalafrica.co.ke info@regalafrica.co.ke

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We would like to introduce to practicing lawyers �RegalLaw� the financial advisory service for lawyers. We will discuss about our Treasury Management service for funds entrusted to your law firm and our Corporate Wealth Planning services covering your business and personal financial plans.

Regal Africa Group Top Plaza, 4th Floor Kindaruma Rd, Nairobi, Kenya P.O. Box 40187, Nairobi 00100 Tel: +254 0714 009 065

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our accounting & audit services are unmatched

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Regal Africa Group is a diversified Financial Service Group that offers Financial Services, Advisory and Real Estate services to Individuals, Businesses and Institutions in East Africa to help them achieve their financial goals.

We offer unrivalled financial solutions to help our clients to achieve their financial goals. GlobalOffice our Accounting and Audit services include but not limited to: Accounting Outsourcing Asset and Inventory management Forensic Audit Internal and External audits Internal Control and Systems assessments Finance and Audit policy manuals Tax services Accounting Software installation and training Regal Africa Financial Services Ltd. Top Plaza, 4th Floor Kindaruma Rd, Nairobi, Kenya P.O. Box 40187, Nairobi 00100 Tel: +254 0714 009 065

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regal africa

Regal Africa Financial Services Ltd. Top Plaza, 4th Floor, Kindaruma Rd, Nairobi, Kenya P.O. Box 40187, Nairobi 00100 Tel: +254 0714 009 065 www.regalafrica.co.ke info@regalafrica.co.ke

EXPAND YOUR INVESTMENT PORTFOLIO Are you looking to invest Part of your income this year or do you have a lump-sum saved up to start investing ? Regal Africa would like to work with you to acheive your goals. We will facilitate the best investment vehicle that is specific to your needs, having factored in the investment amount, risk tolerance and time horizon.

We provide an array of investments options and each of them is concluded upon evaluation of the three mentioned factors. Investments are a means to help you secure a better future, so start investing wisely TODAY.

CONTACT US TODAY!!

LET US GET YOU STARTED...

Tel: +254 0714 009 065 www.regalafrica.co.ke info@regalafrica.co.ke AGRIBUSINESS

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Regal Africa Group Regal Africa Group Top Plaza, 4th Floor 4th Floor TopRd, Plaza, Kindaruma Nairobi, Kenya Kindaruma Rd, Nairobi, Kenya P.O. Box 40187, Nairobi 00100 P.O. Box Nairobi Tel: 40187, +254 0714 00900100 065

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Disclaimer: The views expressed in this publication, are those of the writers where particulars are not warranted - as the facts may change from time to time .

The information and numbers stated and analyzed , are received from public information found in the daily newspapers. This publication is meant for general information only , and is not a warranty , representation or solicitation for any product that may be on offer. Readers are thereby advised in all circumstances , to seek the advice of an independent financial advisor or contact the Regal Africa team to advise them on the suitability of any financial product for their investment purposes.

REGAL REPORT 22

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WE CARE . . .

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WE ARE HERE TO GUIDE YOU . . .

regal africa Creating Wealth

Regal Africa Group Top Plaza, 4th Floor Kindaruma Rd, Nairobi, Kenya P.O. Box 40187, Nairobi 00100 Tel: +254 0714 009 065 www.regalafrica.co.ke info@regalafrica.co.ke