[Graph in pdf]
Equities Market
Stocks recorded major gains in the second week of June 2025, gaining 8.2% on average as nearly all the listed companies recorded upticks. This is as stocks continue to benefit from the ongoing interest rate cuts occasioned by low inflation. All market tracking indices turned green, led by the NSE 10, which gained 6.0%, followed by the NSE 25 and NSE 20, with gains of 5.2% and 3.1%, respectively.
Turnover traded accelerated 350.8% up from KES 1,323.09Mn to KES 5,963.98Mn elevated by a 204% jump in shares traded from 83.35Mn to 253.48Mn shares, and the overall rise in prices, supported a rise in foreign activities.
Foreign participation nearly tripled from 20.4% in the first week of June to 59.5%, largely supported by increased foreign attention in the telecommunication, banking, and manufacturing sectors.
The telecommunication giant, Safaricom, emerged as the week’s top mover with KES 2,894.90Mn after trading 121.75Mn shares, to account for 48.5% and 48.0% of the week’s turnovers and volumes, respectively. Heavy foreign entries on Safaricom saw its price jump 17.1% week on week (w-w) from KES 21.05 to KES 24.65 per share, to emerge as the week’s top second gainer. Safaricom’s foreign buys rose to 78.9% of KES 2,282.99Mn as foreign sales stood at 39.3% or KES 1,138.91Mn, resulting in a net foreign inflow of KES 639.81Mn.
Banks came second with a total turnover of KES 1,978.14Mn from 44.36Mn shares, to account for 33.2% and 17.5% of the week’s value and shares, respectively. These were led by KCB Group and Equity Group which traded 22.84Mn and 10.27MN shares of KES 1,011.10Mn and KES 464.05Mn, respectively.
[Graph in pdf]
Bonds Market
The secondary bonds value traded climbed 83.5% up from KES 16.59Bn to KES 30.43Bn, partly supported by more trading days and what appears to be an improving liquid market.
Attention gathered grounds on infrastructure bond papers to rally the market with KES 15.66Bn or 51.5% of the week’s turnover.
IFB1/2023/17 of 14.399% coupon emerged the week’s top mover with KES 4.15Bn as its yield to maturity (YTM) gained 22.5bps from 12.9254% to 13.1501%. This was followed by IFB1/2022/14 with KES 3.30BN as its YTM lost marginally at 4.4bps from 12.9007% to 12.8825% against a coupon of 13.938%.
The secondary bonds activity was largely supported by the KES 15.79Bn coupon payouts that happened at the start of the week.
In the coming week, we expect low secondary bonds activity, following a zero coupon payouts and a shift of attention to the up-coming primary auction due on Wednesday, 18th June 2025.
June 2025 primary auction will take place on 18th June 2025, targeting KES 50.00Bn from two papers, FXD1/2020/15 (9.7-years) of 12.756% coupon and SDB1/2011/30 (15.7-years) of 12.00% coupon. Watch out for our bidding advisory.
[Graph in pdf]
Yield Curve
The NSE yield curve sustained mixed movements in the week, even as market activity remained kept improving despite the market being starved of in the short-term papers.
The long-end shifted downwards, supported by the long–end papers, especially those from the May primary auction that continue to rally the market. Major downwards shifts happened on the 14-year and 21-year papers rallied by the re-opened FXD1/2022/15 and FXD1/2022/025 re-opened in May 2025.
In the third week of June, we expect little low activity in the secondary market with yields on the reopened papers set to edge up as investors seek better compensation rates.
[Graph in pdf]
Interbank
The interbank rate dropped 12.1bps from 9.76% to -9.64%, largely driven down by the 25.0bps cut on the official base lending rates from 10.00% to 9.75% that happened early in the week. This pulled the average interbank rate 10.6bps down from 9.82% to 9.70%.
Liquidity demand, however, rose 271.6% w-w from KES 3.70Bn to KES 13.75Bn to push the average liquidity 121.6% up to KES 17.48Bn.
Bank excess liquidity dropped 10.3% in the week from KES 18.50Bn to KES 16.60Bn on what appears to be the impact of the pay-as-you-earn tax payment that happened on Monday, 9th June 2025.
[Graph in pdf]
Treasury Bills
Improved liquidity saw oversubscriptions persist, with the market receiving KES 56.97Bn while the government accepted KES 17.20Bn on low maturities that stood at KES 11.00Bn, of which KES 10.86Bn will be reinvested back next week on Monday, 16th June 2025.
The government’s acceptance of only KES 17.20Bn is also viewed to be triggered by low liquidity demand as the financial year comes to an end by 30th June 2025.
Investors’ preference was noted on the 364-day paper, which received a subscription of KES 39.79Bn or 3979% subscription. This was followed by the 91-day paper with KES 14.60Bn.
Return on investments across the three papers shrank further with the 364-day paper shedding the most with a 24.9bps from 9.9985% to 9.7500% largely driven down by the improving liquidity.
[Graph in pdf]
Currency
The shilling remained largely stable against the US dollar while strengthening against the British pound and the Japanese yen. Against the Euro, the local shilling however, lost 0.6% on what appears to a faster than economic growth in the Euro area compared to the local market.
Forex reserves remained on an uptrend, attracting an additional 3.4% of USD 367Mn from USD 10,589Mn the first week of June to hit a new record high of USD 10,946Mn by the end of the second week to hit a record high of USD 10,589Mn, 1.2% higher from that of USD 10,467Mn the week before, sufficient for 4.7- months of import. These reserves benefited development partners’ inflows especially from the World Bank, where disbursements of KES 97.00Bn or USD 750Mn were anticipated for in early June 2025.
