[Graph in pdf]
Equities Market Local stocks’ prices edged down for the second consecutive week, shedding 0.7% on average as measured by the Nairobi all-share index (NASI). NSE 10 stocks lost the most at 1.4% followed by NSE 25 and NSE 20 with 0.9% and 0.5% losses respectively. The declines were mainly occasioned by sustained foreign exits brought about by the tariff fears fronted by the US.
As a result overall market capitalization thinned 0.7% from KES 2,505.65Bn to KES 2,487.93Bn.
Market turnover however jumped 13.0% up from KES 2,061.51Mn to KES 2,329.28Mn supported mainly by high priced ticker transactions. This was despite an 18.3% drop in the number of shares traded from 99.91Mn to 81.58Mn shares. Inclusive of real estate and exchange traded funds units traded, the total volumes traded were up 15.9% up from 99.91Mn to 84.04Mn.
Foreign participation dropped by over half from 45.1% to 20.2% with a spike in net foreign outflows from a foreign inflow of KES 26.75Mn recorded the week before, to a net foreign outflow of KES 324.44Mn in the week. Heavy net foreign outflows were mainly on the above tariff fears as they come to effect as from 1st August, when the 90-day pause come to an end.
Heavy foreign outflows were witnessed on the banking and the telecommunication sectors.
Sector performance saw Banks rally the market after changing hands 37.03Mn shares valued at KES 1,590.16Mn, to account for44.1% and for 68.3% of the market volumes and turnover traded, respectively. This was followed by the telecommunication and the manufacturing sectors with values of KES 437.77Mn and KES 129.75Mn, respectively.
Equity Group led the banks with KES 603.03Mn after trading 12.70Mn shares, largely transacted by local investors. Equity Group’s price lost marginally at 0.3% from KES 49.65 to KES 49.50 per share. We retain the Bank’s price valuation at KES 54.00 per share, a 9.1% upside from the current price.
KB Group and Standard Chartered followed at third and fourth positions after trading KES 400.84Mn and KES 308.94Mn, respectively. KCB Group recorded the highest foreign sales of 82.0% or KES 328.85Mn as foreign sales remained low at 15.8% or KES 63.77Mn, resulting a most net foreign outflow of KES 265.38Mn, refer to page 1 for more. This is as foreigners cash in on the gains witnessed while exiting emerging to developed markets on tariff uncertainties.
Safaricom took second top mover after trading 11.50MN shares of KES 437.77Mn as its price attracted 1.0% from KES 26.00 to KES 26.25 per share. Heavy foreign sales were also spotted on Safaricom at 66.9% compared to foreign sales of 38.3%.
Umeme lost the most at 35.8% week on week (w-w) from KES 21.25 to KES 13.65 immediately after its KES 8.00 per share interim dividend book closure which happened on Monday, 14th July 2025.
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Bonds Market
Secondary bonds market value traded nearly doubled at96.0% w-w from KES 31.99Bn to KES 62.70Bn, largely supported by the on the run paper that entered the secondary market in the week. This was also partly supported by primary auction amounts that were not taken up by the government.
The July re-opened paper, FXD1/2018/25, emerged the week’s top mover after trading KES 15.25Bn as some investor cashed in while its yield to maturity declined 82.0bps from 14.1465% to 13.3263%. As a result, the paper accounted for 24.3% of the week’s value traded.
Overall, market attention remained on normal paper to transact KES 48.70BN or 77.7% of the entire market turnover.
[Graph in pdf]
In the second last week of July 2025, we expect market activity to slow down as investors watch out for the August 2025 auction issues. Following the heavy payouts totaling to KES 181.66Bn due in August 2025, we expect infrastructure paper re-openings.
[Graph in pdf]
Yield Curve
The yield curve activities mainly happened on the short-end and the long-end while the middle-curve remained relatively stable on little to no activity in the section.
The long-end of the yield curve generally shifted downwards largely on the entry of the primary papers to the secondary market where some investors cashed in as yields narrowed down normally.
In the second last week of July, we expect a further downward shift in the long-end as demand on the short-end pull the short-end curve down.
[Graph in pdf]
Interbank
The interbank rate edged up marginally in the third week of July, from 9.62% to 9.64% to push the average interbank up from 9.63% to 9.64%.
The marginal rise follows increased liquidity demand in the week, large towards the value added tax (VAT), exercise duty, rental and with-holding tax payment plus the primary auction value payment that happened on Monday, 14th July 2025.
Bank excess liquidity also rose by almost half from KES 10.7Bn to KES 15.5Bn on effect from improved market liquidity supported by government coupons and maturities payouts.
[Graph in pdf]
Currency
The local shilling continue remaining strong, stabilizing at KES 129.24 per US dollar for the third consecutive week. Against the British pound, euro and the Japanese yen, the shilling gained 1.1%, 0.6% and 1.3% during the week on what remains to be a strong macro-economic outlook.
The shilling stability is largely attributed to high forex reserves which currently stands at USD 11.19Bn, sufficient for 4.9 months of import cover.
June 2025 diaspora remittances declined 3.9% month on month from USD 440.08Mn in May to USD 423.25Mn in June 2025. This were up 13.8% year on year 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 in relation to compared to USD 2,379.45Mn of the first six months of 2024.
The shilling is also strengthened by the rising exports especially that of tea, coffee and horticultural crops to support the shilling.
