Kenya Equities Market Review 2025 & Early – 2026 Update

Executive Summary

Kenya’s equities market closed 2025 on a firmly positive footing, delivering strong double-digit returns across all major indices despite persistent foreign investor outflows, elevated operating costs, and a challenging global backdrop. The year was defined not only by price performance, but also by structural transformation, including regulatory reforms, index innovation, corporate consolidation, and improved market access for retail investors.

While foreign participation remained net negative, domestic liquidity, pension funds, and retail investors increasingly drove market activity. The appreciation of the Kenya Shilling, easing inflation, and gradual normalization of interest rates provided a more supportive macroeconomic environment relative to 2023–2024, even as higher taxes and cost-of-living pressures constrained consumer demand.

Market Performance

Full-Year Performance (2025)

In 2025, the Kenyan equities market was on a broad upward trajectory:

• NSE 20 Index: +52.5%
• NSE All Share Index (NASI): +48.9%
• NSE 10 Index: +48.0%
• NSE 25 Index: +47.4%

The strong rally reflected improved macroeconomic stability, currency appreciation, easing inflation, and selective earnings resilience—particularly within the banking sector.

Weekly Performance (Early January 2026)

During the week under review, the market continued its positive momentum:

• NSE 10: +2.3%
• NSE 25: +2.1%
• NASI: +1.8%
• NSE 20: +1.3%

Performance was driven by gains in large-cap banking stocks, notably Absa (+8.0%), KCB (+5.2%), and NCBA (+2.4%). However, the rally was partially tempered by marginal declines in EABL, Standard Chartered, and BAT, underscoring continued stock-specific dispersion.

Trading Activity & Foreign Investor Flows

Turnover Trends

• Full-year turnover: USD 1.1 bn, up 40.6% from USD 0.8 bn in 2024
• Weekly turnover: USD 8.2 mn, down 30.8% week-on-week

The increase in annual turnover reflects improved confidence, greater retail participation, and the impact of market access reforms such as the removal of odd-lot trading restrictions.

Foreign Participation

• 2025 net foreign outflows: USD 92.9 mn
• 2024 net foreign outflows: USD 16.9 mn

Despite strong market returns, foreign investors remained net sellers throughout most of the year, reflecting global portfolio reallocations, risk aversion toward frontier markets, and relatively higher yields available in developed markets.

Encouragingly, during the latest week, foreign investors turned net buyers for the first time in two weeks, albeit marginally, signaling tentative stabilization in sentiment.

Corporate Performance & Profit Warnings

In 2025, eight listed companies issued profit warnings, down from nine in 2024 and fifteen in 2023. This declining trend points to gradually improving operating conditions.

Companies issuing profit warnings included:

• Williamson Tea Kenya Plc
• Centum Plc
• Kapchorua Tea Kenya Plc
• WPP Scangroup Plc
• TPS Eastern Africa Plc
• Kenya Airways
• Standard Chartered Bank Kenya
• Umeme Limited

The improvement reflects currency stability and easing inflation, though profitability remained constrained by high taxation, cost pressures, and subdued consumer purchasing power.

Listings, Suspensions & Market Discipline

Suspensions

Three securities were suspended during the year:

• Bamburi Cement Plc – following Amsons Industries’ acquisition of 96.5%, paving the way for compulsory acquisition and potential delisting after more than 50 years on the NSE.
• TransCentury Plc – under receivership due to unpaid loans and governance challenges.
• East African Cables Plc – similarly under receivership and non-compliant with listing requirements.

These suspensions brought the total number of suspended companies to six, alongside Mumias Sugar, ARM Cement, and Deacons East Africa, reinforcing the Exchange’s commitment to investor protection and market discipline.

New Listings

• Shri Krishana Overseas Limited joined the NSE, expanding exposure to manufacturing and export-oriented businesses.
• Satrix MSCI World Feeder ETF provided Kenyan investors with access to global developed equity markets.

Looking ahead, Family Bank Plc is expected to list, strengthening the banking sector’s representation.

Liquidations

Within the insurance sector, Invesco Assurance was placed under provisional liquidation, reflecting prolonged financial distress, governance weaknesses, and losses in high-risk segments such as PSV insurance. The development underscores the need for stronger risk management and regulatory oversight within the industry.

Regulatory & Market Structure Developments

1. Removal of Odd-Lot Trading Restrictions

The NSE removed minimum trading lot requirements, allowing investors to trade from one share. This reform significantly lowered entry barriers, enhanced retail participation, and aligned the Exchange with global best practices.

2. NSE Market Reclassification

Following CMA approval, the NSE restructured its market segments into:

• Main Investment Market Segment (MIMS)
• SME Market Segment

The reform simplifies issuer obligations and improves clarity for investors.

3. Launch of the EAE 20 Share Index

The East Africa Exchanges (EAE) 20 Share Index was launched as the region’s first cross-border equity benchmark, tracking the top 20 companies across Kenya, Tanzania, Uganda, and Rwanda.

4. NSE Banking Sector Index

The NSE Banking Sector Share Index (NSE BSI) was launched in October 2025, providing a transparent benchmark for banking stocks and enabling structured investment products.

5. NSE 25 Index Update

Sasini Plc was included in the NSE 25 Index, replacing TransCentury Plc following its suspension.

Mergers, Acquisitions & Capital Raising

Key transactions in 2025 included:

• Access Bank Plc’s acquisition of National Bank of Kenya from KCB Group for Kshs 13.3 bn.
• Sidian Bank share consolidation, with new strategic investors acquiring a combined 16.6% stake.
• Kalahari Cement Limited’s acquisition of a 29.2% stake in East African Portland Cement, gaining effective control.
• Sanlam’s fully subscribed rights issue, raising Kshs 2.5 bn with underwriting support.

These transactions highlight ongoing consolidation aimed at building scale, strengthening balance sheets, and improving long-term competitiveness.

Outlook

Looking ahead to 2026, Kenya’s equities market enters the year on stronger footing, supported by macroeconomic stability, structural reforms, and improved market access. However, sustained performance will depend on:

• Continued fiscal consolidation
• Stability in interest rates
• Earnings recovery amid high taxation and cost pressures
• Re-engagement of foreign investors

Overall, while risks remain, the structural progress made in 2025 has materially strengthened the foundation of Kenya’s equity market, positioning it for more resilient and inclusive growth in the years ahead.