Equities Market
The overall equity market continued to show an upward trajectory in its 3rd week of the year, with a 1.0% average gain. The most liquid counters, NSE 10, had a 0.6% growth whereas NSE 20 and NSE 25 counters each had a 0.7% improvement. Banks continued soaring, recording an average gain of 0.9%, driven by early investor positioning ahead of the sector’s earnings season expected in March.
Market activity contracted week on week, with turnover dropping by 26.7% to KES 2.57Bn from KES 3.50Bn, largely brought about by a decline in shares traded during the week by 39.3% to 79.19Mn from 130.52Mn the prior week.
Foreign activity shrunk significantly, dwindling to 31.5% from 43.1% the previous week. Consequently, the market recorded a net foreign outflow of KES 1110.71Mn, down from KES 68.10Mn net foreign inflow the previous week. Heavy net foreign outflows were posted by Safaricom, Absa Gold, Equity Group and Absa Bank Kenya.
Trading activity were largely concentrated in the banking, telecommunications and Exchange traded funds sectors, which together accounted for 82.8% of total market turnover and 58.4% of total shares traded. • Safaricom remained the leading mover, registering a turnover of KES 549.19Mn, down from KES 1,416.67Mn the previous week. This was attributed by a weakened foreign participation in the counter, which dropped from a high of 67.0% to 38.0%. The counter’s volumes traded dropped to 18.76Mn shares from 48.72Mn shares, while its share price advanced by 2.1% to close at KES 29.70 from KES 29.10.
KCB Group took second place, recording a turnover of KES 277.49Mn, with 4.13Mn shares traded compared to 6.10Mn shares in the prior week. This was due to a spike in its foreign sales from 27.7% to 52.4% coupled with a rise in share price by 0.75% to close at KES 67.50.
Equity Group ranked third with KES 244.15Mn in turnover compared to KES 692.58Mn in the previous week, as average foreign participation stabilized at 44.4%. The stock lost 0.75% to close at KES 69.00 per share from KES 69.50 per share last week.
The top gainers of the week were Portland with a 14.0% increment to close at KES 85.25 per share from KES 74.75. Sasin followed with an 11.6% gain to KES 20.20 from KES 18.10, while Nation Media advanced by 7.1% to close at KES 12.85 per share from KES 12.00.
[Graph in PDF]
Bonds Market
Market activity in the secondary market continued to soar significantly this week, with value traded increasing by 79.2% from KES 42.24Bn last week to KES 75.68Bn largely attributed to entry of the January 2026 papers into the secondary trading. The number of deals also increased by more than a half from 603 to 981 deals.
FXD1/2012/20-yrs was the most traded paper with a turnover of KES 13.46Bn as its yield shifted upwards from 12.4129% to 12.6086% against 12.6383% accepted in the primary market. FXD1/2021/25yrs was the second most traded paper, with a turnover of KES 9.0Bn with its yield shifting down by 5.25bps.
We anticipate that market activity will stabilize as investors take part in January switch paper auction set to take place on Monday 19th January 2026.
[Graph in PDF]
Yield Curve
The yield curve experienced mixed reactions in the third week of 2026, with the short-end shifting upwards due to an increase in demand brought about by a scarcity in issuance of similar papers in the primary market.
The middle curve was relatively stable except for the 11-year paper whose yield shifted upwards on impact from the switch auction paper from FXD1-2016-010 (0.6-years) to FXD1-2022-015 (11.3-years to maturity), scheduled for Monday, 19th January for a value date of Wednesday, 21st January 2026, next week.
The long-end curve shifted downwards between 16- and 21-years on effect from the FXD1/2022/025 (21.8-years) entering into the secondary market and trading immediately after its value payment happened on Monday, 12th January 2026.
[Graph in PDF]
Interbank
Interbank moved up marginally from 8.98% to 9.00% to minimally elevate the week’s average interbank from 8.98% to 8.99%. This occurred despite a fast rise in liquidity demand witnessed in the week.
A total of KES 67.08Bn was traded in the interbank market in the first four days of the week, 64.3% higher in relation to a total of KES 40.84Bn traded in the entire second week of the year. Consequently, average daily interbank transactions doubled up from KES 8.16Bn to KES 16.77Bn.
We attribute the surge in liquidity to a readiness/preparation towards Monday’s (19th Jan 2026) primary auction for the above switch papers, from FXD1-2016-010 (0.6-years 15.039% coupon) to FXD1-2022-015 (11.3-years of 13.942% coupon).
[Graph in PDF]
T-Bills
Treasury bills auctions remained oversubscribed at 128.4% after receiving a total of KES 30.83Bn while accepting KES 28.52n. The oversubscription was rallied by re-investments of KES 22.34Bn out of a total of KES 22.72Bn maturing on the auction’s value date, Monday, 19th January 2026.
Market attention remained on the 364-day paper which received KES 29.28Bn or 95.0% of the total subscribed amount, on influence from its higher rate or 9.2033% in relation to 7.8000% of the 182-days and 7.7011% of the 91-day paper, annualized.
In the coming fourth week of January. We expect oversubscriptions to persist, based on the upcoming maturities of KES 30.12Bn, most of which will be re-invested back. Market bias will remain on the 364-day paper on its higher return.
[Graph in PDF]
Currency
The shilling remained strong in the week, stabilizing at USD 129.03 per US dollar, backed by sufficient forex reserves.
Against the British pound and the Euro, the shilling attracted 0.4% while strengthening faster at 0.9% against the Japanese Yen. We view this to be bolstered by a strong local macro-economic outlook and a stable political landscape.
Forex reserves rose 0.8% week on week from USD 12.38Bn to USD 12.48Bn on account of delayed receipts overflowing from the festive remittances and inflows towards the school re-openings.
December 2025 diaspora remittances hit USD 435.50Mn, 12.2% higher compared to USD 388.30Bn receipted in November 2025. USA remained the largest contribute accounting for 53.3% of the total remittances for the month.
Remittances from the USA are however expected to marginally drop as from 2026 on impact from the 1.0% remittance tax effected on 1st January 2026.
