[Graph in pdf]
Equities Market
prices were further up 2.8% in the ending 15th August 2025, still supported by the ongoing earning season and the general impact of the interest rate cuts. This is as the Central Bank effected its 7th consecutive rate cut, reducing the Central Bank Rate (CBR) by 25.0bps from 9.75% to 9.50%.
The market saw nearly all sectors record upticks led by NSE 20 stocks at 3.9% gain followed by NSE 10 and NSE 25 with gains of 3.2% and 2.9% gains, respectively. Sector-wise, the automobiles gained the most at 29.7% followed by the insurance and investment sectors with 7.4% and 6.0%, respectively. Banking prices and Safaricom were up 4.8% and 2.5% on average, respectively
Shares traded jumped 29.8% from 74.93Mn to 97.24Mn shares to push the week’s turnover 13.6% up from KES 2,015.86Mn to KES 2,290.32Mn.
Foreign activity enlarged by over half from 24.2% to 34.2% with a 24.4% improvement in net foreign inflows from KES 264.25Mn to KES 329.33Mn, signaling an improved foreign position on Kenya’s investment land scape.
Market focus remained on the Banking and the telecommunication sectors, controlling 81.4% and 61.5% of the entire market value and volumes traded. The The manufacturing and the energy sectors controlled only 8.0% and 4.8% of the week’s turnovers to take third and fourth positions in that order.
Banks moved a total of KES 1,379.35Mn or 60.6% from 40.68Mn shares 42.7% of total shares traded. The sector was led by Equity Group which changed hands 11.20Mn shares valued at KES 449.60Mn.
Attention on Equity Group saw its price 3.8% up from KES 52.50 to KES 54.50 per share. This was after Equity Group reported KES 41.54Bn profits before tax (PBT) for H1-2025, an 11.8% rise in relation to a PBT of KES 37.17Bn announced in H1-2024. Profits after tax (PAT) jumped 16.9% up to KES 34.63Bn from that of KES 29.62Bn in Q2-2024, on a lower effective tax rate of 16.6% compared to that of 20.3% paid in Q2-2025. The Group’s Board did not recommend interim dividend.
Heavy foreign inflows were noted in Equity Group.
KCB Group took third mover position with KES 405.40Mn from 7.92Mn shares while its price surged 11.7% up from KES 48.35 to KES 54.00 per share.
During the week, KCB Group announced KES 40.32Bn profits before tax (PBT) for the first half of 2025 (H1-2025), representing a 7.1% growth from the KES 38.11Bn reported same period in 2024. The performance was bolstered by higher interest income from loans and advances whose cost of financing dropped also drastically to support the overall net interest income. Profit after tax (PAT) were up 8.0% year on year (y-y) to KES 32.33Bn in H1-2025 from KES 29.92Bn in H1-2024. We issued a BUY recommendation on the counter’s shares price with a reviewed price of KES 60.06 per share, an 11.2% upside.
Absa Bank Kenya closed fifth in the top five movers after trading KES 125.57MN from 6.29Mn shares while its price attracted 0nly 0.5% from KES 19.85 to KES 19.95 per share. This was after Absa reported KES 16.80Bn profits before tax for the first half of 2025 (H1-2025), representing a 10.0% rise from KES 15.27Bn of H1-2024. The performance was supported by a low cost of financing its asset books, growths in non-funded income (NFI) and a low loan loss provisions. We issued a Hold recommendation on the counter’s price with a revised price of KES 21.50 per share.
Safaricom took second mover position with KES 474.52Mn after exchanging the most shares of 17.93Mn. The counter’s price leaped 2.5% up from KES 26.25 to KES 26.90 per share.
[Graph in pdf]
Bonds Market
Secondary bonds market value traded dropped 28.9% from KES 39.22BN to KES 27.90Bn as the number of deals traded thinned 7.0% from 617 to 574 deals. The performance was impacted by focus on the by then ongoing primary auction that happened on Wednesday, 13th August 2025.
FXD1/2018/25 (18-years) emerged the week’s top mover with KES 3.77Bn while its yield to maturity edged up 21.4bps from 13.83% to 14.05%.
In the coming week, we expect a rise in market activities as the August primary auction papers enter the secondary market.
[Graph in pdf]
In the primary auction, a total of KES 323.94Bn was subscribed with the government accepting only KES 95.01Bn, representing a 105.6% performance against target.
The heavy rejections amounted to KES 228.42Bn largely on account of aggressive bidding rates. Most of the accepted amount were non-competitive bids which we perceive to be coming from parastatals and the National Social Security Funds (NSSF).
We anticipate for a tap-sale in the course of the coming week to mop-up some of the liquidity from the market.
[Graph in pdf]
Yield Curve
The yield curve generally shifted down during the week immediately after the primary auction as investors sought to cash in. Papers all the way from the 3-year to 22–year paper saw their yields to maturity decline significantly between -126.7bps (negative) and 8.0bps.
Papers between 3-years and 16-yeears lost between 8.1bps and 49.49.6bps mainly on impact from these re-opened papers, IFB1/2018/015 (7.5-years) and IFB1/2022/019 (15.6-years).
Papers above 18-years to 22-years saw their curve shift down faster between 84.7bps to 126bps occasioned by minimal to zero demand in the section.
[Graph in pdf]
Interbank
The interbank edged down 18.3bps in the week from 9.62% to 9.44% to track the Central Bank Rate (CBR) which was cut at 25.0bps from 9.75% to 9.50%. This saw average interbank down 7.2bps from 9.61% to 9.53% elevated by the first two day of the week before the rate cuts.
Liquidity demand declined further dropped despite the primary auction whose value date is on 18th August 2025. This was largely impacted by low uptake from the government which left the market liquid.
This saw Bank excess reserves improve 26.7% week on week from KES 6.00Bn the Thursday before to KES 7.60BN by close of Thursday, 14th August 2025.
[Graph in pdf]
Treasury Bills
Weekly T-bills auction was undersubscribed for the third consecutive week, receiving KES 23.18BN or 96.6% of weekly target amount. The government accepted KES 23.16Bn representing a 96.5% performance against target.
The performance was impacted by a below target maturities of KES 23.77Bn due on 18th August 2025. This was further impacted by attention to the bonds primary auction.
Returns on investment further thinned in the week led by the 364-day paper at 13.1bps from 9.7130% to 9.5834%. The 182- and 364-day paper lost 6.9bps and 5.4bps respectively.
In the coming week, we expect maturities of KES 23.94Bn due on 25th August 2025.
[Graph in pdf]
Currency
The shilling was remained stable, trading at an average price of KES 129.24 per US dollar.
The shilling remain supported by sufficient forex reserves which improved 2.0% from USD 10,893MN to USD 11,112Mn, sufficient for 4.9-months of import cover.
July 2025 remittances totaled at USD 410.10Mn, 3.0% month on month lower from that of USD 422.83MN recorded in June 2025.
