GCR updates the Kenya Corporate Sector Risk Scores
Johannesburg, 24 May 2021 – GCR Ratings (“GCR”) has updated its Kenyan Corporate Sector Risk Scores. Overall, the outcome of the current review reflects a weakening operating environment, with economic pressures across almost all sectors. Accordingly, several sector risk scores have been reduced, while one has been increased due to industry specific factors.
The following risk scores have been updated since the last publication (April 2020)
Hospitality sector risk score reduced to 2.5, from 3.0 previously
Property sector risk score reduced to 3.0, from 4.0 previously
Manufacturing sector risk score reduced to 2.75, from 3.0 previously
Non-discretionary Retail sector risk score reduced to 3.25, from 3.5 previously
Construction sector risk score raised to 2.75, from 2.50 previously
The corporate sector risk score is an aggregation of a) cyclicality b) ease of doing business and c) sector specific dynamics scores, and is intended to provide users with an overview of the major factors that impact GCR’s assessment of the relative risk of each sector.
Corporate sector risk scores are assessed on a scale of between 0-13 and are a key factor in determining the operating environment component score for each issuer. The core of the GCR Ratings Framework is based on GCR’s opinion that an entity’s operating environment largely frames its creditworthiness. As a result, the operating environment analysis anchors the underlying risk score for the GCR ratings criteria. GCR combines elements of the country risk and sectoral risk analysis, blended across countries for issuers operating across multiple jurisdictions, to anchor a corporate to its current operating conditions. For more details, please read the related criteria and research listed below.
GCR will periodically publish updated “Kenya Sector Risk Scores”, which will supersede previous publications. The publication titled “Kenya Sector Risk Scores, 25 May 2021”, supersedes the publication “Kenya Sector Risk Scores, April 2020”.
CREDIT RATINGS ISSUED AND RESEARCH PUBLICATIONS PUBLISHED BY GCR, ARE GCR’S OPINIONS, AS AT THE DATE OF ISSUE OR PUBLICATION THEREOF, OF THE RELATIVE FUTURE CREDIT RISK OF ENTITIES, CREDIT COMMITMENTS, OR DEBT OR DEBT-LIKE SECURITIES. GCR DEFINES CREDIT RISK AS THE RISK THAT AN ENTITY MAY NOT MEET ITS CONTRACTUAL AND/OR FINANCIAL OBLIGATIONS AS THEY BECOME DUE. CREDIT RATINGS DO NOT ADDRESS ANY OTHER RISK, INCLUDING BUT NOT LIMITED TO: FRAUD, MARKET LIQUIDITY RISK, MARKET VALUE RISK, OR PRICE VOLATILITY. CREDIT RATINGS AND GCR’S OPINIONS INCLUDED IN GCR’S PUBLICATIONS ARE NOT STATEMENTS OF CURRENT OR HISTORICAL FACT. CREDIT RATINGS AND GCR’S PUBLICATIONS DO NOT CONSTITUTE OR PROVIDE INVESTMENT OR FINANCIAL ADVICE, AND CREDIT RATINGS AND GCR’S PUBLICATIONS ARE NOT AND DO NOT PROVIDE RECOMMENDATIONS TO PURCHASE, SELL OR HOLD PARTICULAR SECURITIES. NEITHER GCR’S CREDIT RATINGS, NOR ITS PUBLICATIONS, COMMENT ON THE SUITABILITY OF AN INVESTMENT FOR ANY PARTICULAR INVESTOR. GCR ISSUES ITS CREDIT RATINGS AND PUBLISHES GCR’S PUBLICATIONS WITH THE EXPECTATION AND UNDERSTANDING THAT EACH INVESTOR WILL MAKE ITS OWN STUDY AND EVALUATION OF EACH SECURITY THAT IS UNDER CONSIDERATION FOR PURCHASE, HOLDING OR SALE.