Last week’s trading closed on a cautiously optimistic note as global and local markets sustained a bullish tone despite ongoing headwinds.
Global Markets:
Markets remained upbeat even as the U.S. government shutdown delayed key labor data. The ADP private sector report showed a 32,000 job loss, underscoring persistent structural weaknesses in the labor market and reinforcing expectations for further Fed rate cuts.
European equities rallied, led by Germany and Spain, after service PMI data hit an eight-month high. Global indices posted a median gain of 1.3%, with the DAX (+2.7%) and FTSE 100 (+2.2%) outperforming.
Bond yields eased across most major economies, reflecting a shift toward safer assets amid rate-cut speculation.
Kenyan Equities:
The Nairobi All-Share Index (NASI) rose 0.3% to close at 178.50 points, signaling mild bullish sentiment. Market capitalization edged up to KES 2.81 trillion, while trading volumes fell sharply by 62.9% week-on-week to KES 2.1 billion.
Domestic investors dominated activity with a 64.3% participation rate, as foreign inflows turned positive at KES 112.36 million.
Top Gainers:
- Williamson Tea (+31.2%)
- Car & General (+28.5%)
- Olympia Capital (+23.9%)
Top Losers:
- Unga Group (-5.6%)
- Nation Media (-4.0%)
- Sameer Africa (-3.5%)
The rally in tea counters was driven by anticipation of the upcoming 1:1 bonus share issue by Williamson Tea and Kapchorua Tea, scheduled for October 13, 2025, which is expected to improve liquidity in the counters.
Sectoral Insights:
The automobiles and accessories sector was the week’s standout performer, up 28.5%, thanks to Car & General’s strong momentum.
Conversely, the telecommunication sector declined 1.7%, weighed down by Safaricom’s dip.
Markets are expected to stay range-bound until the November earnings season, when banks and Safaricom announce results that could spark a new rally.
Fixed Income:
Short-term government papers recorded mixed performance, with investors favoring the 364-day T-bill, which attracted bids worth KES 7.38 billion.
Spot rates ticked up slightly, indicating tighter liquidity conditions and a possible hold in the Central Bank Rate (CBR) at next week’s MPC meeting.
Secondary bond turnover dropped 26% to KES 42.34 billion, driven by activity in IFB1/2018/015 and IFB1/2022/019.
Eurobonds & Macroeconomy:
Eurobond yields rose marginally, though the trend is expected to reverse following Kenya’s successful $1.5 billion Eurobond issuance, which will help smoothen the country’s debt maturity profile.
The Purchasing Managers’ Index (PMI) rebounded to 51.9 in September, back into expansion territory, signaling renewed optimism and business recovery amid stable fuel prices and exchange rates.
What’s Next:
All eyes are on the Monetary Policy Committee (MPC) meeting on October 7, 2025, where a rate cut remains possible to boost credit growth.
Investors are also tracking corporate actions, including dividend payments from EABL, KCB Group, ABSA, and Stanbic Holdings.
