[Graph in pdf]
Equities Market
Stock prices edged up for the second consecutive week to gain 5.8% on average in the week ending 16th May 2025, as nearly all the thirteen listed sectors recorded upticks. The market mainly benefitted from the earnings announced in May and the relaxation of the global trade tariff uncertainties. As a result all the price tracking indices turned up, led by NSE 10 with a 6.6% gain followed by NSE 25 and NSE 20 with gains of 5.6% and 4.1% gains, respectively. Major price upticks happened on the telecommunication, banking and the commercial services sectors.
This saw the overall market capitalization up 5.9% week on week (w-w) from KES 1,994.14Bn to KES 2,112.06Bn.
Weekly shares traded jumped 62.2% up from 100.34Mn to 162.73Mn shares to nearly double the week’s turnovers from KES 1,789.51Mn to KES 3,247.46Mn. Increased activity mainly happened on Safaricom.
Market foreign participation declined to 40.3% with improved net foreign inflows of KES 246.20Mn compared to an average of 46.2% of KES 40.77Mn net foreign outflows. Improvements mainly remained on Safaricom which recorded 60.9% average foreign activity with an improved net foreign entries.
The telco giant, Safaricom, emerged the week’s most traded counter after changing hands KES 1,391.52Mn of 71.91Mn shares. Improved foreign attention on Safaricom saw its price expand 7.8% from KES 18.50 to KS 19.95 per share.
Safaricom price surge was mainly supported by an 82.0% foreign buys of KES 1,141.27Mn compared to a foreign sales of 39.8% foreign sales of KES 553.21Mn, resulting to net foreign outflows of KES 588.06Mn.
Banking sector moved KES 1,188.92Mn from 37.13Mn shares led by Equity Group which transacted 7.44Mn shares valued at KES 356.33Mn. The Bank’s shares price moved up 2.5% from KES 47.40 to KES 48.60 per share a head of its KES 4.25 per share book closure scheduled for 23rd May 2025.
We expect Equity Group’s share price to stabilize down immediately after the above dividend book closure scheduled for next week Friday 23rd May 2025.
KCB and Co-operative Bank took third and fourth positions after trading 7.11Mn and 19.20Mn shared of KES 294.14Mn and KES 276.85Mn turnovers respectively. KCB Group’s price surged 11.3% from KES 38.50 to KES 42.85Mn per share rallied by improved foreign transactions. During the week, Co-operative Bank announced KES 9.63Bn profits before tax (PBT) for the first Quarter of 2025 (Q12025), representing a 6.8% rise from that of KES 9.01Bn recorded the same period in 2024, find our earnings update earlier circulated.
In the coming week, we expect focus to remain on Safaricom, and banks especially Equity Group and Absa as they report their Q1-2025 financials on 20th May 2025. Attention is also expected on KCB Group and Stan-Chart on expectation of their Q1-2025 results on 21st May 2025.
[Graph in pdf]
Bonds Market
Secondary bonds market Value traded improved 23.6% w-w to KES 44.17Bn from that of KES 35.74Bn traded the week before. This was as the bonds activity improved 30.4% from 739 deals the week before to 964 deals, elevated by the May re-opened papers.
Market focus remained on the on the run papers, FXD1/2022/25 and FXD1/2012/20. FXD1/2022/25 emerged the most traded paper with KES 12.19Bn despite its yield to maturity remaining relatively stable at 14.2167% compared to 14.2576% the Friday before. This was however 32.2bps lower from the 14.5384% accepted in the primary market.
FXD1/2012/20 came second with KES 7.38Bn as its yield to maturity dropped 24.1bps to 13.4078% from an average of 13.6489% accepted in the primary auction.
In the second las week of May 2025, we expect only KES 11.86Bn coupon payouts due on 19th May and thereafter only KES 0.52Bn coupon payouts.
[Graph in pdf]
Yield Curve
The yield curve generally shifted down during the week to reflect the overall market direction of interest rates as directed by the Central Bank. Both the short-end and long-end shifted down with long-end widening faster influenced by entry of the primary papers in the secondary market.
The section around the 13-year paper lost the most at 66.9bps from 12.5935% to 12.3510% mainly influenced by the FXD1/2022/25 (12-year paper) whose yield curve rate fell 60.5bps from 12.5834% to 12.1830%, being the most traded paper in the market.
[Graph in pdf]
Interbank
Interbank rate dropped marginally at 2.9bps from KES 9.90% to 9.85% on low liquidity demand. Average interbank also moved down minimally from 9.91% to 9.85%.
Weekly liquidity demand dropped 59.9% from KE 16.00Bn to KES 6.41Bn as government securities payouts were offset by new government demand via the government treasury borrowings.
Bank excess reserves improved 21.7% from KES 14.30Bn to KES 17.40Bn in what appears to be a buildup of funds towards excise duty tax, withholding and value added taxes which all due on 20th May 2025.
[Graph in pdf]
Treasury Bills
Oversubscriptions remained in the week’s T-bills auction receiving KES 43.13Bn or 179.9% subscription while accepting KES 37.41Bn or 86.8% of the subscribed amount to represent a 155.9% performance against a weekly demand of KES 24.00Bn.
The auction was mainly supported by KES 35.40Bn rollover re-investments from a total of KES 35.64Bn maturities due on 19th May 2025.
Returns on investment across the three papers remained relatively stable, shedding 1.2bps, 1.8bps and 0.8bps to 8.3699%, 8.5831% and 10.0022% on the 91-, 182, and 364-day papers respectively. Market attention remained on the 364-day paper which received KES 29.68Bn while KES 24.02Bn being accepted, to account for 64.2% of the accepted amount, mainly relatively higher returns.
[Graph in pdf]
Currency
The local currency remained stable to trade at USD 129.30 per against the US dollar while gaining a0.2% against the Euro from KES 145.13 to KES 144.90 per euro. Against the British pound and the Japanese yen however, the shilling lost 0.7% and 0.2% respectively.
We view the Kenya shilling stability to be supported by sufficient forex reserves which stood at USD 10,164Mn, sufficient for 4.5-months of import cover.
Forex reserves remain cushioned by the rising foreign remittances, and receipts from different development partners. Foreign remittances remained stable in April totaling at USD 422.89Mn compared to that of USD 422.90MN received in March 2025.
