Equities Market
The broader market extended its decline, slipping by 1.0% week-on-week on average, weighed down by losses in the telecommunication (-2.2%), manufacturing (-.0.8%), and investment (-0.8%) sectors. The NSE 10 Index retreated by 0.6%, while NSE 20 and NSE 25 indices dipped by 0.2% and 0.5%, respectively. Banking stocks also came under pressure, falling by 0.5% on average.
Market activity slowed considerably during the week, with total turnover declining by 14.2% to KES 1.96Bn from KES 2.28Bn recorded in the previous week. This was despite a 44.7% jump in traded volumes to 92.15Mn shares from 63.67Mn shares, largely attributable to a surge in 21.18Mn shares traded in Nation Media counter.
Foreign investor activity eased to 23.6% from 40.0% in the preceding week, while net foreign outflows elevated to KES 741.92Mn compared to KES 150.43Mn in net foreign inflows previously. Nation Media (KES 348.38Mn), KCB Group (KES 154.03Mn) and Safaricom (KES 122.53Mn) accounted for the bulk of the net foreign outflows.
Trading activity remained concentrated in the banking, commercial and services, and telecommunication sectors, which collectively accounted for 80.4% of total market turnover and 71.2% of shares traded. The banking sector dominated activity, contributing 45.5% of total turnover, followed by the commercial and services sector at 24.4%.
Nation Media was the most actively traded counter, posting a turnover of KES 351.94Mn from 21.27Mn shares, a surge of 21.27Mn shares from 0.094Mn, which generated KES 1.39Mn in the previous week. The heightened activity was driven by increased foreign exits, with foreign participation rising to 49.5% from 0.11%. Consequently, the stock price edged up by 2.3% week-on-week to KES 15.40 from KES 15.05.
KCB Group followed with a turnover of KES 254.64Mn from 2.79Mn shares, up from KES 214.46Mn from 2.32Mn shares the previous week. The counter was largely supported by an uptick in foreign participation to 31.9% from 8.8%, although the stock price declined by 3.0% to KES 89.75 from KES 92.50.
The telco giant, Safaricom, ranked third with KES 205.67Mn in turnover from 5.70Mn shares, a slight decline from KES 531.33Mn turnover generated from 14.65Mn shares in the prior week. This drop was largely due to a contraction in foreign participation to 48.9% from 61.9%, with the major contraction being in foreign buys. Its share price edged down by 2.2% to KES 36.55 from KES 35.75.
Among the top gainers, I&M Group led the market with a 6.1% rise to KES 87.50 from KES 82.50. Stan-Chart followed with a 3.2% gain to KES 6.40 from KES 6.20, while Sanlam advanced by 2.4% to KES 10.65 from KES 10.40.
[Graph in PDF]
Bonds Market
Despite the settlement of recently auctioned papers on 5th October 2026 and their entry into the secondary market, secondary market activity weakened, with turnover declining by 35.1% to KES 54.46Bn from KES 83.96Bn, while the number of deals fell from 1,019 to 882.
The IFB1/2021/18-year bond was the most actively traded paper during the week, recording a turnover of KES 6.93Bn. It was followed by the FXD1/2012/20-year bond, which posted a turnover of KES 6.34Bn.
Looking ahead, the upcoming primary auction is set to result in a reduction in secondary market activity as investors begin to shift focus toward the auction expected in the week ahead.
[Graph in PDF]
Yield Curve
The yield curve shifted lower across most papers during the week, largely driven by the entry of recently auctioned bonds into the secondary market.
At the short end of the curve, however, yields edged higher as investor demand for shorter-dated papers reduced.
In contrast, yields across the medium- and long-term segments of the curve declined, largely due to the offloading of the FXD3/2019/15yrs and FXD1/2019/20yrs to investors who might have missed it in the primary auction last week.
Looking ahead, yields are expected to trend higher in the coming week as investors seek more attractive discounts in anticipation of the second primary bond auction for the month of October.
[Graph in PDF]
Interbank and Monetary Update
The Monetary Policy Committee (MPC) held the Central Bank Rate (CBR) at 8.75% on 7th October 2026, despite rising global inflationary pressures driven by higher food and energy prices. The Committee expects Kenya’s inflation to remain within the target range, supported by prudent monetary policy, government interventions, and a stable exchange rate, and believes the current policy stance remains adequate to sustain macroeconomic stability and anchor inflation expectations.
The monetary policy transmission was seen in the interbank rate, which remained stable, averaging at 8.75% and closing at the same level, signaling relatively stable liquidity conditions in the market.
Bank excess reserves rose by 39.9% from KES 15.80Bn to KES 22.10Bn week on week despite the withholding tax payments made on 9th October 2026.
Week on week, the closing demand weakened by 37.5% to KES 8.95Bn from KES 14.32Bn, while average demand eased by 37.5% to KES 14.32Bn from KES 8.95Bn.
[Graph in PDF]
T-Bills
The weekly Treasury bills auction was oversubscribed by 69.2%, attracting bids worth KES 75.37Bn against an offer of KES 28.00Bn, with the government accepting KES 45.51Bn of the submitted bids, resulting in a performance rate of 162.5%.
Investor appetite was heavily concentrated on the 91-day paper, which was oversubscribed by 527.6%, receiving KES 50.21Bn in bids, of which KES 20.45Bn was accepted. The 182-day also saw strong demand, with subscriptions amounting to KES15.53Bn.
The improved performance was supported by KES 48.18Bn of T-Bill maturities that were due on Monday 12th October 2026. Looking ahead, subscription levels are expected to improve as KES 44.22Bn matures on 19th October 2026, with a portion of the proceeds likely to be reinvested in the upcoming Treasury bills auction.
[Graph in PDF]
Currency
The Kenyan shilling weakened by 0.1% week on week to average at KES 129.91 against the US dollar. It also appreciated by 0.2% and 0.3% against the Japanese yen and the euro, while weakening by 0.2% against the British pound.
Foreign exchange reserves declined slightly by 1.3% (USD 194Mn) to USD 14.73Bn from USD 14.93Bn in the previous week. Despite the dip, reserves remain adequate at 5.9 months of import cover, against 4.0 months.Forex reserves remain well cushioned by diaspora remittances and agricultural export inflows.
Diaspora remittances for August rose 3.5% to USD 451.85Mn from that of USD 436.58Mn recorded in July 2026. Year on year, the remittances were up 6.0% from that of USD 426.13Mn of August 2025.Cumulative inflows over the 12 months to August 2026 fell by 1.3% to USD 5,013Mn from USD 5,079Mn in the same period of 2025.
