Market Ends Month Steady as Foreign Outflows Persist

Overview
The Nairobi Securities Exchange (NSE) closed the month of September on a muted note, with the Nairobi All Share Index (NASI) posting a marginal gain of 0.03% to 176.74 points. Despite the stability in index levels, market sentiment remained fragile, weighed down by persistent foreign outflows and constrained liquidity. The total market capitalization stood at KES 2.78 trillion, reflecting minimal movement from the previous session.

Equities Performance
Equity turnover rose sharply by 253.7% to KES 535.80 million, driven primarily by renewed activity on large-cap counters. Safaricom led trading, accounting for nearly 60% of total market turnover, though its price slipped by 0.3% to close at KES 28.90. Other notable movers included KenGen, KCB Group, and Kenya Power, with modest price movements across the board. On the gainers’ side, Kapchorua Tea and Express Kenya surged by 9.4%, while Home Afrika and Sameer Africa featured among the day’s top decliners.

Fixed Income and Global Context
The fixed-income segment saw a 15.0% decline in bond turnover to KES 11.88 billion, signaling moderate investor participation. The FXD segment remained the most active, contributing over two-thirds of total trades. On the global front, U.S. markets extended gains following PCE data that aligned with forecasts, boosting expectations for additional Federal Reserve rate cuts in the final quarter of the year. However, renewed weakness in oil prices — driven by expectations of an OPEC+ production increase — reinforced a cautious outlook across emerging markets.

Market Outlook
With subdued foreign investor participation and limited macro catalysts, the NSE is likely to experience sideways trading in the near term. Local investors are expected to dominate activity, favoring high-dividend and value counters as they position for Q4 earnings season.

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Banking Sector H1’25 Report

Overview
Our H1 2025 Banking Sector Report presents an in-depth analysis of Kenya’s financial institutions amid evolving macroeconomic conditions and shifting capital markets. The report highlights resilient fundamentals, robust capital buffers, and compelling valuations that position the sector for sustainable earnings growth and dividend stability.

Key Highlights

• Positive Sector Outlook: We maintain a “Buy” recommendation on the Kenyan banking sector, supported by strong profitability and solid capital adequacy levels across major lenders.
• Attractive Valuations: The sector trades at a P/TBV of 0.74x, below its historical average of 0.94x, presenting significant upside potential.
• Dividend Strength: Yields range between 6.6%–11.4%, with banks maintaining consistent payout histories.
• Diversifying Revenue Streams: Leading institutions are expanding into investment banking and asset management, enhancing fee income and return on equity.
• Key Risks: Elevated non-performing loans (NPLs) and foreign exchange margin compression could pressure short-term profitability, though mitigated by prudent risk management and strengthened provisions.
• Top Picks: Equity Group (EQTY) and KCB Group (KCB) stand out as Strong Buy opportunities, supported by superior expected returns of 29.4% and 25.9%, respectively.

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Equity Market Weakness Persists as Trading Volumes Contract Sharply

Overview
The Nairobi Securities Exchange (NSE) closed the week on a bearish note, with the Nairobi All Share Index (NASI) declining by 0.7% to 176.68 points. Weak investor sentiment continued to weigh on activity, resulting in a 66.7% decline in turnover to KES 151.47 million. Foreign investors remained net sellers, registering outflows of KES 5.54 million, as cautious positioning ahead of global inflation data dampened appetite for risk assets.

Equities Performance
Trading activity was predominantly domestic, with local participation at 92.7%, underscoring a retreat by offshore investors. The market breadth tilted negative as decliners outnumbered gainers. East African Breweries, Kenya Power, and Co-operative Bank dominated turnover, while Uchumi Supermarkets, Car & General, and Home Afrika led the gainers list, posting gains of up to 8.8%. Conversely, Express Kenya and Nation Media Group were the day’s major laggards, shedding 7.4% and 5.1% respectively.

Fixed Income and Macro Environment
The bond market mirrored equity weakness, recording a 4.3% contraction in turnover to KES 13.97 billion. Activity remained concentrated in the FXD segment, which accounted for 70.4% of total trades. The IFB1/2022/19Yr issue remained the most liquid paper in the session. Globally, U.S. markets regained footing after the PCE inflation data aligned with expectations, reinforcing the likelihood of further Fed rate cuts in Q4 2025.

Market Outlook
We expect the local equities market to remain range-bound in the near term, with limited foreign inflows and cautious institutional repositioning. Investors are likely to favor dividend-paying counters and defensive financials as global monetary policy uncertainty persists.

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Consolidation and Easing Turnover Mark End of Week

The Nairobi Securities Exchange closed the week on a subdued but positive note, with indices largely consolidating the significant gains achieved earlier in the week. The Nairobi All-Share Index recorded a marginal gain of 0.1%, finishing at $177.89$. The primary indices followed suit, with the NSE-10, NSE-20, and NSE-25 all showing slight increases of between $0.1$ and $0.2$. The Market Capitalization remained virtually flat (up $0.0$).

Market activity saw a significant cool-down following Wednesday’s high turnover. Equity Turnover dropped sharply by 73.3% to close at KES $454.62$ Mn. This retreat in volumes is typical towards the end of a strong trading week, suggesting a pause before new market drivers emerge. Encouragingly, foreign investors returned to a net buying position, with Net Foreign Flows recording an inflow of KES $31.78$ Mn, a strong reversal of 177.8% from the previous day’s outflow, indicating foreign interest in local assets remains resilient.

Top Gainers: Home Afrika and Umeme Lead the Rally

Home Afrika delivered the strongest performance, soaring by 9.9% to KES $1.22$. The utility counter Umeme also had an excellent session, gaining 8.2% to KES $7.62$, completely reversing its loss from the beginning of the week. Media stock Nation Media Group posted a healthy increase of 6.6%, while Crown Paints continued to show strength with a 5.1% rise. This indicates renewed domestic interest in value-oriented and volatile counters.

Top Losers: Oil and Automotive Counters Under Pressure

The largest drop of the day was recorded by Total Kenya, which fell by 7.6% to KES $32.15$, likely due to profit-taking in the oil marketing sector. Car & General (Automotive/Trading) also saw significant decline, dropping by 5.5%. Flame Tree Group and WPP Scangroup posted losses of $5.3$ and $4.7$ respectively. Finally, Uchumi Supermarkets dropped by 2.9% to KES $0.34$, ending the week on a weaker note after an earlier mid-week gain.

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The week ending September 26th, 2025, delivered mixed signals to global markets, creating a challenging environment for investors. The Federal Reserve’s preferred inflation gauge offered a sign of relief, but concurrently released labor market data suggested the path to further interest rate cuts may be less certain. Get the full breakdown of last week’s market movements and what to watch for next.

Key Market Highlights

U.S. Core PCE In-Line: U.S. core Personal Consumption Expenditures (PCE) data for August came in at 2.9%, matching analyst expectations. This tame reading bolstered market sentiment by offering the Fed more flexibility for potential rate cuts.

Employment Resilience: Weekly jobless claims declined by 14,000 to 218,000, signaling continued resilience in employment conditions. This unexpected strength, however, dampened prospects for aggressive Fed easing this year.

Global Performance: Global indices closed the week with a median gain of 0.2%. Japanese equities were a key beneficiary, supported by a weakening yen.

U.S. Markets Soften: U.S. markets softened as investors locked in partial profits following historic rallies.

The Fed’s Dilemma: Tame Inflation vs. Strong Jobs

While the PCE data points to inflation moving closer to the Fed’s long-term target, the robust labor market figures create a counter-narrative. The conflict between these two data points suggests the Federal Reserve is navigating a delicate situation where over-easing could reignite inflationary pressures. This dynamic is central to shaping investor expectations and market direction in the final quarter.

Looking Ahead

Next week, all eyes will be on the release of U.S. September labor market data. This release could strengthen the case for further Fed rate cuts if the figures highlight structural weaknesses, or it could further temper expectations if the employment picture remains strong.

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Market Rally Continues with Soaring Turnover

The bullish trend intensified on Wednesday, with the Nairobi Securities Exchange extending its gains from the previous session. The Nairobi All-Share Index registered a robust increase of 1.6%, closing higher at $177.13$. All primary indices recorded impressive advances: the NSE-10 Index gained 2.5% and the NSE-20 Index climbed by 1.6%. This performance indicates a deepening of the market rally.

Investor enthusiasm was palpable, with Equity Turnover nearly doubling, surging by 89.7% to reach a remarkable KES $2,002.07$ Mn. This significant volume suggests major block trades or heightened institutional participation. Despite the strong domestic activity, the tide turned for foreign investors, with Net Foreign Flows registering a substantial outflow of KES $38.73$ Mn, a sharp 147.1% swing back from Tuesday’s inflow. However, the overall market strength was sufficient to push the Market Capitalization up by another $1.6$ to KES $2,790.73$ Bn.

Top Gainers: Standard Group’s Massive Rebound

The market saw several significant price recoveries, showcasing high volatility in some counters. Standard Group was the day’s star, surging by 9.9% to KES $5.98$, following its appearance on the previous day’s losers list. Similarly, Express Kenya staged an impressive $8.1$ rebound after a massive $9.1$ drop on Tuesday. Unga Group, up by 7.5% to KES $21.50$, also erased its previous losses. CIC Group continued its upward trajectory, appreciating by another 7.5%.

Top Losers: Profit-Taking in Manufacturing and Finance

The losers’ board saw limited damage, but included a few prominent names. Shri Krishana Overseas Plc was the biggest decliner, dropping by 5.9%. The tourism and finance sectors felt pressure, with TPS Eastern Africa and Jubilee Holdings recording losses of $3.1$ and $1.6$ respectively. Cement manufacturer East African Portland Cement fell by 2.1%, while the energy sector also weakened slightly, with KenGen Plc dropping by 1.5%.

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Strong Market Activity Drives Indices Higher

The Nairobi Securities Exchange (NSE) commenced the week with impressive momentum, as key benchmark indices posted strong gains across the board. The Nairobi All-Share Index advanced by 0.5%, closing at $174.32$, while the NSE-10 Index and NSE-20 Index also saw increases of $0.7$ and $0.5$ respectively, signaling broad-based positive sentiment.

The standout feature of the day was the surge in market participation. Equity Turnover skyrocketed by a staggering 212.7%, settling at KES $1,055.35$ Mn from the previous close of KES $337.54$ Mn. This intense activity suggests renewed investor confidence. Furthermore, foreign investors reversed their trend, contributing significantly to the positive atmosphere. Net Foreign Flows recorded a substantial inflow of KES $82.15$ Mn, marking a dramatic $207.7$ swing from the prior day’s net outflow. This infusion of foreign capital helped push the overall Market Capitalization up by $0.5$ to KES $2,746.44$ Bn.

Top Gainers: Agro-Processor Leads the Pack

The gainers’ list was dominated by strong company-specific performance. Kakuzi Plc led the charge, appreciating by 7.6% to close at KES $425.50$. Crown Paints and CIC Group both saw solid rises of 3.9%. Other notable movers included Uchumi Supermarkets and HF Group, which closed with gains of $2.9$ and $2.5$ respectively, indicating a favorable day for select counters across various sectors.

Top Losers: Express Kenya Takes a Hit

On the flip side, Express Kenya was the biggest decliner, plummeting by 9.1% to KES $7.40$. The utility counter, Umeme, also experienced significant downward pressure, falling by 8.9%. Unga Group dropped by 7.0% to KES $20.00$. The $6.5$ decline in Standard Group saw it feature among the top losers, reflecting targeted profit-taking in certain segments of the market.

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The Nairobi Securities Exchange closed Friday, September 19, 2025, with mixed signals: while indices remained under pressure, activity levels picked up sharply, suggesting renewed investor participation.

The Nairobi All-Share Index (NASI) fell 0.9% to 173.50 points, extending Thursday’s losses. Similarly, the NSE-10 Index dropped 1.2% to 1,725.26 points, the NSE-20 Index fell 1.4% to 2,903.15, and the NSE-25 Index eased 1.2% to 4,499.62 points.

In contrast, market turnover jumped 52.0% to KES 573.3 million, showing a recovery in trading volumes. Market capitalization edged down by 0.9% to KES 2.73 trillion. However, sentiment was weighed down by heavy foreign investor outflows amounting to KES -23.56 million, reversing the previous day’s modest inflows.

On the upside, Limuru Tea continued its rally, gaining 9.9% to KES 340.75. Other top gainers included TPS Eastern Africa (+5.3%), Eaagads Plc (+5.0%), Kapchorua Tea (+5.0%), and Express Kenya (+4.6%). These counters saw strong investor demand, reflecting sector-specific confidence, particularly in agriculture and hospitality.

The laggards’ list was led by Home Afrika, which fell 9.7% to KES 1.12. CIC Group slumped 8.3% to KES 4.32, while ABSA Kenya Plc (-6.6%), Crown Paints (-4.1%), and Sanlam Kenya (-3.8%) also closed lower, weighed by selling pressure.

Friday’s session reinforced the ongoing bearish undertone in the market, though rising turnover suggests investors are still actively repositioning ahead of key economic and corporate developments.

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Kenya’s equities market closed Thursday, September 18, 2025, in negative territory as all major NSE indices posted losses, reflecting broad-based investor caution.

The Nairobi All-Share Index (NASI) declined by 1.5% to 175.02 points, while the NSE-10 and NSE-20 shed 1.6% and 1.4% respectively. The NSE-25 Index was not spared either, retreating 1.3% to settle at 4,552.16 points.

Trading activity slowed dramatically with equity turnover plunging by 88.4% to KES 377.3 million, pointing to reduced participation across counters. Market capitalization also contracted by 1.5% to KES 2.76 trillion. Interestingly, despite the bearish performance, net foreign flows rebounded sharply, closing at KES 6.86 million compared to heavy outflows in the previous session — an encouraging sign of renewed foreign investor interest.

Among the day’s highlights, Limuru Tea surged 10.0% to KES 341.00, emerging as the top gainer. Other notable risers included Express Kenya (+9.7%), Olympia Capital Holdings (+9.1%), Kakuzi Plc (+6.5%), and Sameer Africa (+5.5%).

On the losing side, Home Afrika tumbled 9.5% to KES 1.24, extending its recent volatility. HF Group (-5.1%), Kapchorua Tea (-4.7%), CIC Group (-4.5%), and Carbacid Plc (-3.6%) also featured among the laggards.

Overall, the day reflected a cautious trading mood, with investors selective on positions even as foreign appetite showed signs of recovery.

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