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Equities Market
Stock prices shed 1.9% week-on-week, largely driven by the telecommunication sector (Safaricom), which lost 6.7%, the insurance sector (-1.4%) and the construction sector (-1.3%). NSE 10, NSE 20 and NSE 25 counters edged down by 0.1%, 0.2% and 0.3%, respectively. Banks, however, rose by 2.1% week on week, supported by the ongoing stellar Q1-202 earnings season.
Market activity fell considerably over the week, with total turnover dropping by 29.1% from KES 4,371.35Mn to KES 3,097.43Mn. This was primarily due to a 17.1% contraction in traded volumes from 112.93Mn shares to 93.60Mn shares, with a 21.90Mn drop happening in Safaricom.
Foreign activity shot up to 45.1% from 40.8% in the prior week, with net foreign outflows of KES 371.81Mn, slightly lower than KES 751.19Mn recorded the week before. Safaricom experienced a top net foreign inflow, while Equity Group and EABL registered high net foreign outflows.
Trading activity remained concentrated in the banking, manufacturing, and telecommunications sectors, which together accounted for 85.4% of total market turnover and 47.3% of traded volumes. The banking sector dominated, contributing 49.8% of the total value traded, followed by manufacturing at 18.9%.
Equity Group emerged as the top mover, recording a turnover of KES 823.37Mn from 11.00Mn shares, a drop from KES 1,027.50Mn and 13.75Mn shares in the prior week. This drop was largely due to reduced foreign participation, which dwindled from 72.4% to 46.3%, while the share price edged up by 0.3% to KES 75.00.
Safaricom ranked second, posting a turnover of KES 513.80Mn from 16.41Mn shares, a decline from KES 1,198.63Mn and 38.31Mn shares the previous week. This occurred despite the surge in foreign activity, up from 35.2% to 68.6%, while its share price dropped 6.7% from KES 32.20 to KES 30.05.
EABL followed with a turnover of KES 486.39Mn, compared to KES 20.17Mn in the previous week. This was occasioned by a spike in foreign activity to 98.0% from 0.5%, despite its share price declining by 0.18% to KES 243.25.
Flame tree emerged as the top gainer with a 13.8% surge in share price from KES 1.88 to KES 2.14. Co-op Bank followed with a 10.5% gain to KES 32.50 from KES 29.40, after reporting an 18.1% spike in profits before tax to KES 11.37Bn un Q1-2026 from KES 9.63Bn in Q1-2025. BAT emerged the week’s top loser with a 9.8% loss to KES 513.00 per share after its KES 60.00 final dividend book closure that happened on 8th May for a payment on 12th June 2026.
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Bonds Market
Activity in the secondary bonds market grew week-on-week, with total turnover jumping by 84.2% to KES 41.04Bn, up from KES 22.29Bn in the previous week. The number of deals also rose from 696 to 1098, largely due to the entry of the first May 2026 auction papers into the secondary market.
The FXD1/2021/025 bond emerged as the most actively traded paper, recording a turnover of KES 15.63Bn. It was followed by the FXD1/2012/15-year bond, which posted a turnover of KES 4.00Bn.
Looking ahead, secondary market activity is expected to pick up, as investors begin to rebalance and offload positions in the newly issued primary market securities.
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CBK reopened two more papers for the month of May, FXD3/2019/015(8.3-years, 12.340% coupon) and FXD1/2021/020(15.3-years, 13.444% coupon), targeting 50Bn from the market. The auction and value date are scheduled for 20th and 25th May 2026.
In addition, CBK announced a Switch of KES 10.00Bn from FXD1/2017/010(1.2-years, 12.966% coupon) maturing on 19th July 2027 to FXD1/2021/020 (15.22-years, 13.444% coupon).
[Graph in PDF]
Yield Curve
The yield curve shifted upward week on week, largely influenced by the primary bond auction scheduled for 20th May 2026.
The short end of the curve, around the FXD1/2012/020, saw a downward shift as investors began offloading the paper in the secondary market after its auction last week.
Similarly, the middle segment of the curve, especially around FXD1/2019/020 experienced a downward shift in yields as investors began cashing in on the recently auctioned paper.
The long end of the curve shifted upwards, reflecting investors’ demand for better discounts in anticipation of the primary auction scheduled for Wednesday, 20th May 2026.
Looking ahead, yields are expected to pick up in the coming week, as investors prepare for the upcoming primary auction. This will be influenced by the an expected surge in inflation following an upward expansion of pump prices.
[Graph in PDF]
Interbank
The interbank rate remained relatively stable week on week, closing at 8.75%, as the average interbank rate stabilized at 8.75%, indicating relatively steady liquidity conditions in the market.
Weekly, closing demand rose sharply by 273.3% to KES18.85Bn (from KES 9.07Bn). Moreover, average demand increased by 33.2% to KES 12.08Bn (from KES 9.07Bn), suggesting an uptick in liquidity demand during the week.
Consequently, bank excess reserves slightly declined, contracting by 14.7% week-on-week to KES 27.30Bn, down from KES 32.0Bn. This was mainly driven by the settlement of the primary auction that took place on Monday, 11th May 2026.
[Graph in PDF]
T-Bills
The weekly Treasury bills auction was oversubscribed, with total bids of KES 26.41Bn against an offer of KES 24.00Bn, translating to a subscription rate of 110.0%. The government accepted KES 26.38Bn from the bids received.
Investor demand remained heavily concentrated in the 91-day paper, which was oversubscribed at 183.1%, attracting KES 7.32Bn in bids of which KES 7.31Bn was accepted. The 364-day paper also recorded strong demand, with a subscription rate of 112.4%, while the 182-day paper was undersubscribed.
The strong auction performance was supported by t-bill maturities of KES 37.56Bn on 18th May 2026. A further KES 37.31Bn is set to mature on 25th May 2026, which we expect to support oversubscriptions in the upcoming auction.
Currency
The Kenyan shilling weakened by 0.1% week-on-week, averaging KES 129.33 against the US dollar. However, it strengthened by 0.9% against the Japanese yen, 0.5% against the euro, and 0.7% against the British pound.
Foreign exchange reserves increased by 0.7% (USD 93Mn) to USD 13.51Bn, up from USD 13.41Bn in the previous week, equivalent to 5.7 months of import cover. The reserve position continues to be supported by strong diaspora remittances and agricultural export earnings, despite persistent pressure from external debt obligations.
Remittance inflows declined to USD 397.8Mn in April 2026 from USD 421.1Mn in March, marking an 11.7% drop month on month. However, on a rolling 12-month basis, cumulative inflows increased by 1.1% to USD 5,053Mn from USD 4,997Mn in the same period last year.
Elsewhere, international oil prices jumped by 7.9% to USD 109.26 per barrel for the brent and 10.5% to USD 105.42 per barrel of the West Texas Intermediate (WTI) oil. This was driven by the collapse of ceasefire negotiations between the US and Iran.
