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Equities Market
Stocks underperformed in the month of April 2025 mainly impacted by the ongoing economic shocks emanating from the global tariffs. Global price loss however slowed down immediately after the Trump announcement of a 90-day hold on the tariffs except for China before being implemented in a move seen to solicit for negotiations.
The local stocks were neither spared to record a 3.6% average loss as market activities also fell sharply. NSE 10 stocks lost the most at 4.3% followed by NSE 20 and NSE 25 with 4.1% and 3.4% declines respectively. Year on year however, the prices were up 18.9%.
Volumes traded dipped 23.6% from 470.42Mn to 359.55Mn shares to pull down the value traded 7.3% from 8,112.21Mn to KES 7,518.16Mn, suppressed by the above market volatilities. This was despite the better dividends issued in March 2025 for full year 2024 financials (FY2024), most of whose book closures are yet to happen.
Foreign activity rose sharply from 31.0% in March 2025 to 59.5% in April 2025, sustained heavy foreign outflows in search of better investment havens especially in the United States. Net foreign outflows for the month rose to KES 850.87Mn, an 8.1% lower from that of KES 926.18Mn recorded in March 2025. Heavy foreign activities were on the banking, telecommunication and the manufacturing sector in that order.
Market focus remained in the banking sector which transacted KES 4,045.53Mn from 40.88MN shares to represent 49.6% and 51.3% of the market turnover and volumes transacted. The telecommunication and manufacturing sectors came second and third with KES 1,990.13Mn and KES 932.37Mn from 25.43Mn and 243,500 shares respectively.
Safaricom plc emerged the month’s most traded counter after moving KES 1,990.13Mn from 111.80Mn shares to account for 24.4% and 30.9% of the market value and activities traded in the month. The counter was the most hit from the global trade tariff standoff following its high foreign presence to record a 4.1% m-m price loss from KES 18.30 to KES 17.55 per share.
The telco giant recorded an 82.8% average foreign participation, where 87.0% were foreign sales of all its sales while 78.6% were foreign buys of all its buys, resulting to a total net foreign outflow of KES 167.23Mn.
We expect Safaricom’s FY2025 financial results due on Friday, 9th May 2025 to help its recover some losses on positive sentiments and outlook.
Equity Group led the banking sector with a total turnover of KES 1,715.30Mn from KES 38.30MN shares, rallied by high foreign activity of 87.4% on average. This was largely on heavy foreign sales ahead of the KES 4.25 per share final dividend book closure set for 23rd May 2025. Its foreign sales stood at 94.3% while foreign buys were 80.6% of all its sales and buys transactions, respectively.
KCB Group followed in the third mover position with KES 1,260.36Mn after trading 32.32Mn shares as its price edged down 8.8% from KES 42.15 to KES 38.45 per share. The counter contributed a highest net foreign outflows of KES 481.01Mn on heavy foreign sale offs immediately after its KES 1.50 final dividend book closure on 3rd April for a payment on 23rd May 2025.
The month saw dividend book closures happen for Stanbic and I&M on 16th April, Co-op Bank of 28th April, Absa Bank (K) and BK Group on 30th April each, see below corporate actions table for details.
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Bonds Market
Secondary bonds activity fell 9.9% in April to trade KES 234.19Bn from 3,877 deals traded compared to KES 259.89BN exchanged in the month of March 2025. This was mainly impacted by tight liquidity occasioned by heavy liquidity demand by government.
Normal papers were the most traded papers transacting a total of KES 147.20Bn to account for 53.1% of the market value on their better yields compared to infrastructure papers.
Infrastructure papers however occupied the top three market mover positions led by the IFB1/2024/8.5 paper which transacted a total of KES 32.78Bn as its yield to maturity moved up marginally at 3.5bps from 13.1930% to 13.2278% by the last trading day of April. L
ong-term term IFBs of IFB1/2022/14 and IFB1/2023/17 were the most competitive papers trading at yields of 13.2496% and 13.3795% against coupons of 13.938% and 14.399%, respectively, to take second and third top mover positions respectively.
April primary bonds auction was oversubscribed with KES 84.97Bn while the government accepting a total of KES 83.99Bn to give 105.0% performance against a government target of KES 70Bn. The performance was largely supported by bond re-investments and a tap-sale auction which contributed a total of KES 12.59Bn of the accepted amount.
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Yield Curve
The yield curve experienced mixed movements in April with the short end shifting down marginally as per market expectation, while the middle curve to the long-end shifted marginally upwards influenced by a tight liquid environment. This was further occasioned by the issuance of three middle to long-term papers in the primary auction for May 2025 borrowings as investors push for better yields.
In May 2025, we anticipate minimal shift on the entire yield curve to counter the general expectation brought about by increased liquidity demand from the government.
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Money Market
Inflation
Inflation rate rose for the seventh consecutive months in a row to 4.1% in April 2025 from that of 3.6% and 3.5% witnessed in March and February 2025 respectively. The surge was mainly occasioned in items under food and fuel prices which pushed overall non-core inflation from 7.4% in March 8.4% in April 2025.
Month on month inflation was up 0.3% in April 2025 from that of 0.4% recorded in March 2025.
Food and non-alcoholic index rose by 7.1% in April compared to a 6.6% rise witnessed in March 2025. This was as the price of vegetables (sukuma) and tomatoes rose sharply at 32.8% and 25.5% among other key food items.
Transport inflati0n index rose 2.3% in the 12-months to April 2025 elevated by hiked fare prices following the April Easter holiday influx and higher electric prices. Pump prices however edged down further led by a 9.9% drop on Petrol price followed by an 8.5% and 6.7% drops on diesel and kerosene prices.
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Interbank
The interbank rate dropped 74.1bps in the month of April from 10.68% to 9.94% pulled down by the downward review of the Central Bank rate from 10.75% to 10.00% and the review of interbank policy to track the interbank at CBR ± 75.0bps from CBR ± 150.0bps citing interbank stability.
Liquidity demand doubled pat 113.1% m-m from KES 11.42Bn to KES 24.34Bn. Average liquidity demand however demanded thinned 26.1% from KES 13.77Bn to KES 10.17Bn.
Bank excess reserves dwindled 51.8% m-m from KES 16.00Bn to KES 7.7Bn on impact of drained liquidity via primary bond auctions.
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Treasury Bills
April T-bills auction was oversubscribed at 183.0% of KES 175.71Bn at an acceptance of KES 85.9% or KES 163.22BN acceptance, representing 150.9% acceptance.
The performance was supported by the KES 145.77Bn maturity re-investments that matured in the month. New investments accounted for only KES 17.46Bn or 10.7% of the accepted amount.
Market focus remained on the 364-day paper which contributed KES 88.14Bn or 54.0% of the accepted amount on what we view as investors taking advantage of the higher rates on the paper that remained above to 10% at 10.0208%.
Returns across the three papers edged down led by that on the 182, 364 and 91-day papers with losses of 46.7bps, 44.1bps and 39.7bps to 8.6190%, 10.0208% and 8.4434% respectively.
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Currency
The exchange rate remained stable against the US dollar trading at KES 129.34 by end of April 2025 to retain th average rate at KES 129.51 from an average of KES 129.34 recorded in March 2025.
Forex reserves however dropped 2.1% from USD 9,956Mn to USD 9,749Mn still sufficient for 4.4-months of import cover against a 4.0-month regulatory requirement.
Foreign remittances rose 7.9% to USD 412.41Mn compared to USD 382.24Mn reported in February 2025 with America remaining the largest contributor of 55.2% for the March remittances.
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Public Debt
Total public debt rose 1.3% in the last three months of 2024, from KES 10,790.20B by end of September 2024 to KES 10,925.40Bn by end of 2024. Domestic debt contributes the most to total debt at KES 5,868.30Bn or whie domestic debt declined to a KES 5,057.10Bn or 46.3% of the total debt.
Between 1st October to end of December 2024, domestic debt expanded faster4.8% from KES 5.60trillion to KES 5.87Tr in a move seen to reduce the local currency exchange vulnerability to by reducing external exposure. This is attributed to the depreciation witnessed following the Eurobond maturity witnessed in the period before March 2024 where the exchange rate hit KES 160.00 per US dollar.
External public debt however shrunk 2.5% in the period reported between 1st October and 31st December 2024 from KES 5.19Tr to KES 5.06Tr respectively.
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