The value of equities traded at the Nairobi Securities Exchange more than doubled in the three months to March on investor shift to shares and the Kenya Pipeline Company initial public offering (IPO).
The value rose 122.9 percent to Sh58.3 billion as investors moved money from bonds to equities in the search for higher returns.
Listing of the pipeline company in March added new trading volumes from a counter that has offered investors choice and is now the tenth largest at the bourse with a valuation of Sh111 billion.
Listed shares have been the top performing asset class in the last two years with average returns of 50 percent last year wooing investors seeking to capitalise on the current rally.
“There was hype for an IPO after an 18-year drought which excited the market. It gave the awareness that the market was coming back and good thing NSE has been doing good returns in the last two years,” said Eric Ruenji, chairman of Theo Capital Holdings.
Interest rates have been on a downward trend with Treasury bonds currently offering between 11percent to 13 percent from up to 18 percent in 2024.
“Equity prices remained steady in the first quarter, supported by improved valuations after strong earnings for the full year 2025 and favourable interest rates,” said Pergamon Investment Bank.
“The price momentum was, however, cut short by the ongoing geopolitical tensions, which have so far seen several Central Banks pause their monetary easing initiatives,” added the investment bank.
Investors were also positioning themselves in profitable counters, especially banks, in the run-up to the financial reporting period as they anticipated high dividend payouts.
Consequently, the banking sector occupied seven positions out of the quarter’s top 10 movers’ list led by Equity Group, KCB Group and Stanbic Holdings.
Equity Group was the most traded counter with 165.6 million shares valued Sh11.9 billion exchanging hands.
“The banking and telecommunications sectors dominated the market, accounting for 78.8 percent of the total value traded and 49.4 percent of the volume – 930.57 million shares,” said Pergamon Investment Bank.
Foreign investors were net sellers in the market with the net foreign outflow more than doubling to Sh8.7 billion from Sh3.2 billion at the end of March last year.
The US-Iran war triggered geopolitical tension which drove up foreign exit.
Use of a new M-Pesa platform – referred to as Ziidi Trader – by individual investors has also been cited for increased retail investors participation.
Ziidi Trader has made access to and participating in the equities market easier by allowing investors to transact in shares without going through stockbrokers.
The involvement of M-Pesa opens up the NSE to 30 million users of the payment platform, turning them to potential customers.
Among the top performing companies at the NSE in the last year are small counters such as former tyremaker Sameer which is up 438 percent to trade at Sh16.25, diversified retailer Car and General that is up 223 percent and agricultural firm Eaagads which is up 174 percent.