Kenya Equities Market Update | 16 January 2026

Market Performance

The Kenyan equities market recorded a mixed performance during the week, reflecting selective investor positioning amid ongoing foreign outflows and heightened activity in banking stocks.

The NSE 25, NASI, and NSE 20 indices gained 0.4%, 0.4%, and 0.3%, respectively, while the NSE 10 declined by 0.3%. As a result, year-to-date (YTD) performance stood at gains of 4.0% for the NSE 20, 3.9% for NASI, 3.6% for the NSE 25, and 2.7% for the NSE 10.

Market performance was primarily driven by gains in select large-cap banking stocks. NCBA Group, Absa Bank, and Cooperative Bank recorded weekly gains of 8.3%, 2.7%, and 1.9%, respectively, providing support to the broader indices. However, these gains were partly offset by losses in other large-cap counters, notably East African Breweries (EABL), KCB Group, and Stanbic Holdings, which declined by 3.6%, 1.1%, and 1.0%, respectively.

Banking Sector Performance

The NSE Banking Sector Index advanced by 1.0% to close the week at 215.8, up from 213.6 in the previous week. The sector’s performance mirrored the broader market trend, with gains led by NCBA Group (+8.3%), Absa Bank (+2.7%), and Cooperative Bank (+1.9%).

These gains were partially offset by declines in KCB Group (-1.1%), Stanbic Holdings (-1.0%), and DTB Kenya (-0.8%), reflecting selective profit-taking and cautious investor positioning ahead of key corporate developments.

Market Turnover and Foreign Investor Activity

Equities turnover increased by 9.3% to USD 23.9 million, up from USD 21.8 million recorded in the previous week. This brought the year-to-date total turnover to USD 73.6 million, indicating a modest improvement in market liquidity.

Despite the increase in turnover, foreign investors remained net sellers for the second consecutive week, recording a net selling position of USD 4.3 million, compared to net selling of USD 8.6 million in the prior week. Consequently, the YTD foreign net selling position widened to USD 12.4 million, though this remains significantly lower than the USD 92.9 million net outflow recorded in 2025.

Weekly Highlights

Proposed Acquisition of a Controlling Stake in NCBA Group PLC by Nedbank Group Limited

NCBA Group PLC issued a cautionary announcement following receipt of a Notice of Intention from Nedbank Group Limited to acquire approximately 1.1 billion ordinary shares, representing 66.0% of NCBA’s issued share capital, through a partial tender offer, subject to regulatory approvals.

If completed, the transaction would result in Nedbank acquiring a controlling interest, while the remaining 34.0% of NCBA’s shares would continue trading on the Nairobi Securities Exchange (NSE).

Key aspects of the proposed transaction include:

• The acquisition will be implemented through a partial tender offer open to all NCBA shareholders, with acceptances taken on a pro-rata basis
• Nedbank has secured irrevocable undertakings from shareholders representing approximately 71.2% of NCBA’s issued share capital, subject to final offer terms
• The transaction values NCBA at approximately 1.4x book value, with consideration structured as 20.0% cash and 80.0% Nedbank shares listed on the Johannesburg Stock Exchange (JSE)
• Nedbank has indicated that its final shareholding will not exceed its target by more than 5.0%, in line with takeover regulations

Strategically, the transaction aligns with Nedbank’s expansion strategy beyond Southern Africa, with Kenya positioned as a regional anchor market for East African growth. Importantly, Nedbank has stated that it intends to retain NCBA’s brand, governance structures, management team, and operational model, with no immediate systems integration planned.

Following the announcement, NCBA’s share price reacted positively, rising to Kshs 98.25 from Kshs 89.75, representing a 9.5% gain, as investors priced in the potential strategic upside.

Overall, the transaction represents a shareholder-level change in control rather than an operational restructuring, with NCBA well positioned to benefit from Nedbank’s balance sheet strength and cross-border banking expertise, while reinforcing Kenya’s attractiveness to strategic foreign investors.

Kenya Pipeline Company Initial Public Offer (IPO)

During the week, Kenya Pipeline Company (KPC) launched its Initial Public Offer (IPO) at the NSE through an Offer for Sale, marking one of the largest capital markets transactions in East Africa and a major milestone in Kenya’s privatisation programme.

The IPO involves the sale of a 65.0% stake, equivalent to 11.8 billion shares, at an offer price of Kshs 9.00 per share, targeting gross proceeds of Kshs 106.3 billion and implying a post-listing market capitalisation of approximately Kshs 163.6 billion. The offer runs from 19 January 2026 to 19 February 2026, with trading expected to commence on 9 March 2026.

Upon completion, the Government of Kenya will retain a 35.0% strategic stake, subject to a two-year lock-in period, aimed at ensuring governance continuity and post-listing stability.

While the IPO offers exposure to a strategic infrastructure asset with stable cash flows and a dividend-oriented profile, KPC’s valuation metrics appear stretched relative to its profitability and dividend yield. From a risk-adjusted perspective, the pricing implies limited upside, positioning the IPO as a cautious hold for value-focused investors, particularly when compared to more attractively priced alternatives within the market.

Conclusion

Overall, the Kenyan equities market continues to exhibit resilience supported by selective sector strength, particularly in banking stocks, even as foreign investor participation remains cautious. The proposed NCBA–Nedbank transaction and the KPC IPO underscore deepening capital markets activity, reinforcing the NSE’s role as a regional hub for strategic transactions.

While near-term market performance is likely to remain selective and sentiment-driven, these developments point to improving structural depth, sustained investor interest, and growing opportunities for long-term capital deployment within Kenya’s capital markets.