ICEA LION Asset Management (ILAM), one of East Africa’s pioneering investment management firms, has released the Fourth Quarter 2025 edition of the ILAM Investor Pulse under the theme “Investing Ahead of the Curve.”
The report offers forward-looking insights into Kenya’s macroeconomic resilience, investment opportunities, and consumer spending patterns, positioning investors to navigate the next growth cycle with confidence.
Global Economy: Slower growth, diverging monetary policies
According to the Q4 2025 ILAM Investor Pulse, 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 markets, including Kenya, are maintaining positive real interest rates to safeguard price stability and attract foreign capital.
This, ILAM notes, is a deliberate balancing act between taming inflation and sustaining investor confidence in an environment of tight global liquidity and fragmented capital flows.
Kenya’s Economic Outlook: Credit Expansion and Policy Stability
Kenya’s economy remains robust and resilient, projected to grow at 5.2% in 2025. The rebound is being driven by revived agriculture, a strong services sector, and improved credit conditions.
The Central Bank of Kenya’s recent 25-basis-point rate cut to 9.25% demonstrates renewed confidence in macroeconomic stability, with inflation currently contained at 4.6% — well within target.
Kenya’s policy credibility and diversified economy continue to distinguish it regionally. In 2025, Central Bank Governor Dr. Kamau Thugge was awarded an “A” grade by Global Finance magazine, recognizing his exemplary leadership in maintaining inflation control, currency stability, and policy independence.
“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.”
Fund Manager ICEA LION Asset Management presents Outlook for 2023
Market Outlook: NSE Performance and Portfolio Strategy
The Nairobi Securities Exchange (NSE) has continued to rally through 2025, buoyed by attractive valuations, foreign inflows, and renewed local participation. Currency stability and easing yields in fixed income have further fueled demand for equities.
Gondo emphasized that ILAM’s fixed income portfolios are well-positioned to benefit from duration extension and yield repricing, while equities remain attractive given resilient earnings and high dividend yields.
“Sustainability is no longer an abstract concept—it’s a practical investment lens that strengthens both financial performance and societal impact,” he added.
“Our mission is to help investors anticipate value, not react to it—building portfolios that are sustainable, diversified, and primed for long-term growth.”
Q3 2025 ILAM Consumer Spending Index: Signs of a Rebound
Alongside the Investor Pulse, ILAM released the Q3 2025 ILAM Consumer Spending Index, which tracks real economy trends through surveys of 1,200 consumers and 200 retail businesses across major Kenyan cities.
Key highlights include:
• Higher-Quality Consumer Spending
One-third of consumers attributed higher spending to increased purchases, not rising prices—up from one-quarter in Q2 2025.
• Income Stagnation Persists
Half of the respondents reported flat income levels year-on-year, marking the highest stagnation rate in 2025. Eldoret led in income gains, while Mombasa recorded the most declines. The upper, middle, and high-income segments reported the strongest improvements.
• Savings and Investments Edge Up
More income was channeled to savings, investments, and insurance, with SACCOs, banks, and chamas holding dominant positions.
• Retail Sales Rebound
Over 60% of retail businesses reported higher sales between June and September 2025 — marking the second consecutive Q3 rebound. Growth was driven mainly by increased customer volumes rather than price hikes.
Retail stores led the recovery, with Nakuru and Mombasa topping regional sales growth, while Nyeri lagged.
Overall, the ILAM Consumer Spending Index rose by 9% year-on-year, signaling sustained consumer resilience and improving retail momentum.
ILAM Leadership: Stability Meets Strategy
Closing the event, Einstein Kihanda, CEO of ICEA LION Asset Management and immediate former Chairman of the Institute of Certified Investment and Financial Analysts (ICIFA), called for proactive investing amid shifting market dynamics:
“Investors who position their portfolios to take advantage of the prevailing environment stand to benefit the most. Stability and sustainability are not competing goals—they are twin pillars for the next growth cycle.”
About ICEA LION Asset Management
ICEA LION Asset Management (ILAM) is part of the ICEA LION Group, one of East Africa’s most established financial services institutions with operations spanning asset management, insurance, and investments. ILAM manages diverse portfolios for retail, institutional, and high-net-worth investors, anchored on research, innovation, and sustainable value creation.
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