Equities Market
Equities prices extend their upward momentum for the 4th consecutive week, gaining 0.4% on average. Large cap counters dropped by 0.3% while NSE 20 and NSE 25 counters rose by 0.3% and 0.4%, respectively. Banks remained on a strong footing, recording a 1.0% jump, supported by early investor positioning ahead of the sector’s earnings season expected in March.
Weekly market turnover edged up by 24.6% from KES 2.57Bn to KES 3.20Bn despite volumes remaining relatively stable. The faster rise in value traded was mainly driven by market focus on high-priced ticket counters especially Equity Group whose volumes doubled from 3.53Bn to 6.52Bn shares as well as a significant spike in Absa Gold prices from KES 3260 to KES 5915 per share.
Foreign investor participation rose to 34.8% from 31.5% the previous week, accompanied by a growth in net foreign outflows from KES 1110.71Mn to KES 548.30Mn. Notable foreign outflows were seen on Stanbic and Absa Gold while Kenya Power experienced improved net foreign inflows.
Market focus was in the banking, telecommunications and manufacturing sectors, which jointly contributed 83.5% of total market turnover and 53.2% of total shares traded during the week.
Stanbic Holdings was the top mover of the week with KES 524.70Mn in turnover from KES110.45Mn after 2.65Mn shares were traded. The spike in turnover is largely attributed by a significant rise in foreign buy to 89.9% from 0.18% the prior week.
Safaricom ranked second, posting a turnover of KES 487.17Mn, with 16.44Mn shares traded compared to 18.76Mn shares the prior week. This was driven by a decline in foreign sales from 62.43% to 39.0%, alongside a 0.2% drop in its share price to close at KES 29.65.
Equity Group retained the 3rd position, with a turnover of KES 448.71Mn, up from KES 244.15Mn in the previous week, as foreign buys rose from 6.82% to 45.9%. The stock shed 0.4% to close at KES 68.75 per share from KES 69.00 the previous week.
Absa Gold was the top gainer of the week with an 81.4% jump to close at KES 5915.0 per share from KES 3260.0 which was largely driven by the diversification of reserves by central banks away from the US dollar toward Gold. Kenya Airways followed with a 41.1% gain to KES 4.60 from KES 3.26 due to an ongoing tassle over control between Singapore and Qatar Airways. NCBA Group rose by 8.3% to close at KES 97.50 per share from KES 90.00 after a proposed interest by Nedbank to acquire 66% of NCBA’s share capital.
[Graph in PDF]
Bonds Market
The secondary bonds market rose by 37.47% from KES 75.68Bn to KES83.57Bn with number of deals jumping by 25.79% from 981 to 1234.This was as a result of the switch auction that took place on Monday 19th January 2026 whose settlement took place on Wednesday 21st January 2026.
IFB/2018/15 was the most traded paper with KES 16.38Bn in turnover of as its yield shifted downwards by 40 bps from 11.7998% to 11.3998%. FXD1/2021/25yrs was the second most traded paper, with a turnover of KES 8.63Bn with its yield shifting up by 4.91bps.
We expect the market will have an improvement in activities due to end of month rebalancing by financial institutions.
[Graph in PDF]
Yield Curve
The short-end of the yield curve shifted downwards, supported by high demand for the papers in the section, with heavy demand being on the 4-year and 5-year papers. This is further occasioned by the scarcity of similar papers in the primary auction.
The middle curve also experienced a downward shift, especially on the 12 and 13-year papers, upon entries of the switch to auction paper (FXD1/2022/015 (11.3-years)) and January 2026’ s primary auction paper (FXD1/2019/020 (13-years)), which entered secondary trading.
The long-end experienced an overall uptrend, on early impact of the February 2026 issues particularly FXD1/2018/25 (17.3-years, 13.400% coupon).
In the last week of January, we expect the yields to remain relatively unchanged as market activity is expected to improve, influenced by end-of-month transactions.
[Graph in PDF]
Interbank
The interbank rate shed marginally from 9.00% to 8.98% to stabilize the daily average interbank rate at 8.99%. The slow movement was influenced by a general liquid market that depressed the demand side.
Week on week, liquidity demand fell by over a half from KES 14.20Bn to KES 6.30Bn between Friday, 16th and Thursday, 22nd January 2026. Overall low liquidity demand saw average funds traded in the interbank market drop from KES 16.26Bn to KES 11.57Bn in the second last week of January 2026.
Bank excess liquidity, however, shrank 48.2% from KES 26.50Bn to KES 13.70Bn, lessened by the above switch auction payment of KES 25.17Bn on 21st January and the tax payments for value-added tax (VAT), withholding tax, excise duty and rental tax, which happened on 20th January 2026.
[Graph in PDF]
T-Bills
The week’s T-Bills auction was undersubscribed for the first time after weeks of oversubscription, receiving KES 18.35Bn, while the government accepted KES 18.21Bn.The undersubscription occurred despite high maturities of KES 30.12Bn, of which KES 29.97Bn were expected to be reinvested on Monday, 26th January 2026, the auction’s value date. We view the low re-investment levels as a shift by investors to other emerging options in the market.
Market was distributed between 182- and 364-day papers, receiving KES 8.83Bn and KES 8.15Bn bids, respectively.
Returns on investment across the three papers dropped minimally at 2.6bps, 0.7bps and 0.3bps to 7.7274%, 7.7934% and 9.2002% on the 91, 182 and 364-day papers, respectively.
[Graph in PDF]
Currency
The shilling remained strong in the week, to stabilize at KES 129.02 per US dollar, supported by sufficient forex reserves. However, against the British pound, euro and the Japanese yen, the shilling lost 0.9%, 1.3% and 0.1%, respectively.
Forex reserves dropped 2.1% week on week from USD 12.48Bn to USD 12.22Bn after shedding USD 258Mn, on what appears to be an impact from a Eurobond coupon payment for the January 2034 paper which happened on 23rd January 2026.
December 2025 diaspora remittances hit USD 435.50Bn, 12.2% higher compared to USD 388.30Bn receipted in November 2025. The USA remained the largest contributor, accounting for 53.3% of the total remittances for the month.
