ICEA Lion Asset Management Second Quarter 2024 Consumer Spending Index

ICEA Lion Asset Management Second Quarter 2024 Consumer Spending Index:

 “Individual spending trends rise again while retail business sales trends flatline,” indicates East Africa’s pioneering investment management firm, ICEA LION Asset Management (ILAM).

(Left to right) Mr EINSTEIN Kihanda, CEO ILAM & Mr Richard Muriithi, Senior Portfolio manager ILAM discuss the index findings during the launch.

On July 29^th, 2024, ILAM released its quarter 2, 2024 (2Q24) Consumer Spending Index, under the theme ‘Individual spending trends rise again but retail business sales trends flatline.

At the event, Richard Muriithi, Senior Portfolio Manager at ICEA LION Asset Management highlighted the following key trends:

• Income trends worsen slightly; half of respondents indicated static income levels over the last year, while 30 per cent reported lower income and less than 20 per cent saw their incomes rise in the second quarter of 2024 compared to the same period in 2023. This represented deterioration from the first quarter of 2024 (1Q2024) when 25 per cent of respondents noted increases and decreases in their income respectively. Respondents working in the manufacturing and education sectors had the highest proportions of improved incomes while those in the trade, transport and logistics sectors had the largest proportion of reduced incomes.
• ILAM Consumer Spending Index rises by 5.5 per cent in 2Q24. According to the findings the Index rose by 5.5 per cent in the second quarter of 2024 driven by a rise in individual spending that offset static retail business sales trends.
• Individual spending trends improved by 11 per cent in the second quarter of 2024 (2Q2024) compared to first quarter. The additional spending was mainly driven mainly by women and consumers aged between 26 and 35. The rise in spending was largely attributed to higher cost of items purchased. In terms of socio-economic categories, the lower middle-income segment recorded the strongest improvement in spending trends in the second quarter, while the lower income segment had the biggest decline in spending trends. Of respondents 87 per cent made purchases using their own income, while 13 per cent relied on credit.
• Retail business sales trends flatline: Retail business sales trends remained flat between the second quarter of 2024 and the first quarter. An improvement in sales trends in large and medium sized businesses during the second quarter was offset by a decline in sales trends in small and micro businesses (SMEs). In terms of business sectors, the clothing, retail shopping and food & beverage sectors saw an improvement in sales trends in the second quarter but this was offset by a plummeting of sales trends in the house, fittings and accessories sectors.

According to Einstein Kihanda, ICEA LION Asset Management (ILAM) CEO and also the immediate former Chairman of the Institute of Certified Investment and Financial Analysts (ICIFA), individual spending trends remained resilient. “Individual spending trends remained resilient notwithstanding the many challenges in the economic environment. On the other hand, retail business sales trends remained relatively muted,” he affirmed.

Notably, the ICEA LION Group is a financial services provider offering innovative products and services in Insurance, Pensions, Investments, and Trusts. “We deliver our services through four companies in Kenya, ICEA LION General Insurance, ICEA LION Life Assurance, ICEA LION Asset Management, and ICEA LION Trust Company Limited. We also have operations in Tanzania and Uganda,” a statement from the company explains.

Moreover, ICEA LION Asset Management (ILAM), a research-driven investment manager, consistently delivers superior returns to both retail and institutional clients. With a 30-year track record in property development and investment in Kenya, ILAM stands out, consequently, as the longest-serving investment manager in the industry. It offers investment opportunities both in Kenya and offshore and actively seeks alternative investment avenues such as Private Equity for its clients. Currently, ILAM manages assets totalling over K sh 300 Billion.

The company is honoured to have received the prestigious Fund Manager of the Year (Overall) award for three consecutive years. In June 2024, GCR Ratings affirmed ICEA LION Life Assurance Limited and ICEA General Insurance Company’s national scale financial strength rating at AAA (KE) with a stable outlook. The rating affirms ICEA LION Insurance Holdings’ solid financial profile, characterized by very strong capitalization and above average earnings.