[Graph in pdf]
Equities Market
Stock prices edged down in the second week of July 2025, shedding 1.3% in the week, largely impacted by new tariff updates. NSE 10 and NSE 25 lost 0.7% each while NSE 20 stocks gained 0.4%. This is despite a better outlook on stocks fronted by the low inflations which is expected to drive interest rates further down and thereby make equities investing lucrative. Nonetheless, the outlook on equities remain positive with an upward trajectory on overall prices especially in the telecommunications, banking and energy sectors.
Market foreign participation remained below 50% mark with at 45.1% with a 12.6% reduction in net foreign inflows to KES 26.75Mn, in comparison to an average of 44.8% on KES 30.61Mn net foreign inflows traded the week before.
Weekly shares traded also thinned at 29.0% from 140.68Mn to 99.91Mn shares to pull down the market turnover 44.8% from KES 3.73Bn to KES 2.06Bn.
Market focus concentrated on the telecommunication and the banking sector which exchanged KES 852.31Mn and KES732.58Mn from 31.80Mn and from 16.79Mn shares, respectively. The two sectors accounted for 76.9% of the market value as the energy, manufacturing and insurance sectors followed to account for 9.8%, 8.3% and 3.0% of the market value traded respectively.
Safaricom retained the top mover position with KES 852.31Mn from 31.80Mn shares, still rallied by foreigners at 65.9% of all its activities. The counter witnessed improved foreign entries from 55.6% to 71.7% as foreigners took advantage of a discounted share price. As such its shares price declined 3.5% from KES 26.95 to KES 26.00 per share.
KCB Group also retained the second mover position after trading 7.35Mn shares, valued at KES 344.11Mn. The Group experienced a decline a sharp drop in foreign activity from 48.0% to 38.8% on low foreign entries, resulting to a 1.3% price erosion.
Equity Group closed top three top counters’ list after trading KES 251.15Mn from 5.03Mn shares whose price dropped 4.1% from KES 51.75 to KES 49.65 per share respectively.
Kapchorua led the agriculture sector to emerge the week’s top gainer at 14.4% gain from KES 321.50 per share after trading 5,600 shares only. This was after announcing a first and final of KES 25.00 per share on 27th June whose book closure and payments dates are set for 31st July and 2nd September 2025 respectively. The agriculture sector emerged the week’s top gainer with a6.1% average gain, followed by the insurance and investments sector with 5.4% and 4.5% average gains respectively.
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Bonds Market
Secondary bonds value traded dropped 32.2% in the week ending 11th July from KES 47.28Bn to KES 31.99Bn, largely affected by the primary auction that happened in the week.
Normal bonds were the most traded bonds especially the recent re-openings to account for a total of KES 28.05Bn or 87.7% of the entire market value traded. The FXD1/2018/10, emerged the week’s top mover with KES 3.01Bn after its yield to maturity dropped by 62.6bps from13.4866% to 12.8602%.
In the third week of July 2025,we expect a rise in market activities following entry of the primary papers, FXD1/2018/20 and FXD1/2018/25, to the secondary market on Monday, 14th July 2025.
[Graph in pdf]
In the primary auction results, a total of KES 76.91Bn was offered while the government accepted KES 66.65Bn, representing 133.3% performance against the required target of KES 50.00Bn.
Both market average and accepted rates were within our aggressive rates earlier recommended in our preauction note:
[Graph in pdf]
Yield Curve
The yield curve experienced mixed reaction in the week especially on the long end on impact from the primary auction. The long-end curve above 17-years shifted upwards as investors demanded better discount from the FXD1/2018/25 (18-years) re-opened paper whose auction happened in the week.
Yield curve between the 13-year and 15-year shifted downwards as some investors sought better returns from the secondary market.
In the third week of July, we expect a general downward shift on the yield curve between 12-years and 18- years papers, to be influenced by the on the run papers, DXD1/2018/20 and FXD1/2018/25.
[Graph in pdf]
Interbank
The interbank rate stabilized at 6.22% in the week despite an elevated liquidity demand for cash towards the settlement of the primary auction and the pay as you earn (PAYE) payment that happened on 9th July 2025.
Liquidity demand accelerated 290.6% up week on week from KES 5.85Bn to KES 22.85Bn to push average demand 140.3% up from KES 4.95Bn to KES 11.93Bn per day.
Bank excess liquidity however nearly doubled from KES 5.50Bn to KES 10.70Bn on cash build up to settle the auction payment of KES 66.65Bn due on Monday, 14th July 2025.
[Graph in pdf]
Treasury Bills
T-bills auction was undersubscribed for the third consecutive week, attracting a total of KES 22.78Bn against a target of KES 24 billion per week. The government accepted 99.9% or KES 22.75Bn to represent a 94.8%.
Investors focus remained fairly balanced across the three papers unlike the past several weeks where market focus concentrated on the 364-day papers.
Return on investments remained quite stable across the three papers after marginal declined of 0.3bps, 1.0bps and 0.8bps on the 91-, 182- and 364-day papers respectively.
[Graph in pdf]
Currency
The Kenyan shilling remained strong in the week, trading at an average of KES 129.24 per US dollar per day, similar to that of the week before.
The shilling is largely cushioned by sufficient forex reserves, which stood hit a new high of. USD 11.20Bn, sufficient for 4.9 months of import cover. The reserves remain strongly supported by forex inflows from both diaspora remittances and inflows from development partners.
Latest statistics for June 2025 diaspora remittances declined 3.9% month on month from USD 440.08Mn in May to USD 423.25Mn in June 2025. Year on year however, the remittances were up 13.8% compared to USD 371.59Mn received in June 2025. Cumulatively, total remittances for the first half of 2025 were up 5.8% to USD 2,518.32Mn compared to USD 2,379.45Mn of the first six months of 2024.
