Equities Market
Equity markets opened the year on a high note, recording a 1.8% uptick in prices, largely attributed by top 10 most liquid counters that rose by 2.3%. Additionally, the NSE 25 and NSE 20 indices recorded gains of 2.1% and 1.3% respectively. The banking sector advanced by an average of 2.6% on what we view to be early positioning by investors ahead of sector earning season in March.
Market activity remained subdued during the week, with turnover sinking by 25.2% to KES 1.07Bn from KES 1.43Bn. The slowdown was attributed to the extended festive period. However, a 9.5% expansion in volume traded from 43.59Mn to 47.74Mn shares was noted due to a 164.6% increase in Kenya Re’s traded shares to 14.01Mn.
Foreign investor participation fell sharply week-on-week to 16.4% from 28.9%, with the market recording a net foreign inflow of KES 6.99Mn, from a net foreign outflow of KES 63.22Mn in the prior week. Notable net foreign inflows were recorded in Safaricom and Tps Eastern Africa, while Equity Group and Absa Gold experienced significant net foreign outflows.
Investor activity was largely concentrated in the banking, telecommunication and insurance sectors, which together accounted for 86.8% of total market turnover and 76.2% of total shares traded.
Safaricom maintained its top mover position registering a turnover of KES362.96Mn, down from KES 428.87Mn previously. Traded volumes slightly declined from 15.25Mn to 12.94Mn shares, while the share price edged up by 1.97% to close at KES 28.50.
Jubilee Holdings ranked second posting KES 133.37Mn as 0.40Mn shares changed hands, compared to 0.05Mn shares in the previous week. The counter dropped by 2.20% to close at KES 322.50 per share.
Equity Group ranked third with KES 128.77Mn in turnover as 1.94Mn shares changed hands from 4.97Mn shares in the previous week. The counter gained 1.9% to close at KES 67.00 per share.
The top gainers were Uchumi which gained a 43.0%, closing at KES 1.13 per share from KES 0.79 the previous week. Standard Group rose by 18.8% to KES 6.58 from KES 5.54, while Home Africa jumped by 14.3% to close at KES 1.36 per share from KES 1.19.
[Graph in PDF]
Bonds Market
Bond market activity remained subdued during the week, largely reflecting the lingering impact of the festive season. The value traded declined by 14.4% to KES 23.16Bn from KES 27.07Bn in the previous week, while the number of deals fell by 20.9% to 390 transactions from 493.
The FXD1/2021/25yr bond emerged as the most traded paper, recording a turnover of KES 4.40Bn. This was followed by FXD1/2021/20yr bond, which posted a turnover of KES 3.22Bn during the week.
Looking ahead, we expect market activity to pick up toward mid-January after value settlement of the upcoming auction as well as resumption to normalcy after the festive seasons.
[Graph in PDF]
Yield Curve
The yield curve shifted upwards in the first week of the year, majorly due to the upcoming primary auction set to take place on Wednesday 7th January 2026.
The middle end of the curve recorded an upward trajectory, on what seems to be influence from the switch paper from FXD1/2016/010yrs (0.6-years) to FXD1/2022/015yrs (11.3-years) where KES 20.00Bn, maturing on 17th August 2026 is set to be transferred.
Similarly, the long end (15–21 years) also experienced an upward movement, attributed to the auction paper, FXD1/2022/025yrs as investor push for better discounts before the primary auction set for this week.
[Graph in PDF]
Interbank
Improved liquidity saw the interbank rate closed the week at 8.99% showing a marginal decline from 9.00% last week. Interbank rate edged down slightly to 8.99% from 9.00% indicating a minimal week on week change in overnight lending rate on average.
Closing demand decreased by 45.0% with the average weekly demand contracting by 6.6% from KES 10.06Bn to KES 9.39Bn, indicating a general drop in short term funding pressures in the market.
Liquidity conditions improved during the week, as bank excess reserves expanded by 9.1%, from KES16.5Bn to KES18.00Bn. This improvement was driven by T-bills payouts of KES 5.26Bn which added funds into the system.
[Graph in PDF]
Treasury Bills
The weekly Treasury bills auction was oversubscribed at 108.0%, attracting total bids of KES 25.92Bn against the KES 24.0Bn on offer, with KES 25.91Bn being accepted.
Investor demand was concentrated in the 91-day paper, which recorded a 158.2% oversubscription, attracting KES 6.33Bn in bids, of which the whole amount was accepted. The 182-day paper also posted strong demand at 112.9%, receiving KES 11.29Bn of which the entire amount was accepted.
In contrast, the 364-day paper was undersubscribed, indicating a shift by investors away from the long term papers in favor of the shorter and medium maturities.
[Graph in PDF]
Currency
The Kenyan shilling opened the year on a stable footing, closing the week at KES 129.05 per US dollar. During the period, the currency strengthened against the British Pound, Japanese yen and Euro, by 0.2%, 0.3% and 0.6% respectively.
Foreign exchange reserves rose to USD 12.39Bn, equivalent to 5.30 months of import cover, remaining comfortably above the Central Bank of Kenya’s statutory minimum requirement of 4.0 months. The reserve build up continues to be supported by resilient diaspora remittances and strong agricultural export receipts.
Diaspora remittance inflows amounted to USD 388.3Mn in November 2025, representing a modest decline from October. On a year-on-year basis, inflows were down 8.3% compared to USD 423.2Mn recorded in November 2024. However, 12-month cumulative remittance inflows to November 2025 rose by 3.6% to USD 5.05Bn, up from USD 4.87Bn over the same period in 2024.
