NSE Valuation Nears KSh 3 Trillion Milestone as Investor Confidence Rises

Kenya, 6 November 2025 - The Nairobi Securities Exchange (NSE) is on the brink of a historic comeback, with its total market capitalization now approaching KSh 3 trillion, the highest level in over two years.

The surge reflects renewed investor confidence, rising foreign inflows, and a strong rally in blue-chip counters, signalling what analysts describe as a “turning point” for Kenya’s capital markets.

According to Business Daily Africa, total NSE valuation hit KSh 2.93 trillion on November 5, buoyed by sustained price recoveries in large-cap stocks such as Safaricom, Equity Group, EABL, and KCB Group.

This represents a gain of more than KSh 1.03 trillion from the market’s low of KSh 1.9 trillion recorded in August 2023.

“The market has shown resilience and strong investor appetite, especially among institutional investors repositioning portfolios as bond yields stabilise,” said Geoffrey Odundo, CEO of the Nairobi Securities Exchange.

“The improvement in sentiment is also linked to lower inflation expectations and greater macroeconomic stability.”

Why This Matters

The rebound underscores the NSE’s gradual recovery from one of its toughest years in recent memory, when high interest rates, capital outflows, and currency volatility drove share prices to multi-year lows.

The rally now reflects shifting investor preferences, with funds flowing back to equities as bond yields ease and the shilling stabilises.

Market analysts believe this could mark the beginning of a sustained bullish phase if macroeconomic indicators continue improving.

“Investors are increasingly pricing in a lower interest-rate environment in 2025, which supports higher equity valuations,” said Eric Musau, Head of Research at Standard Investment Bank.

“Foreign investors, who had fled due to currency risks, are returning cautiously, especially into high-dividend counters.”

The Numbers

1. Total Market Capitalisation: KSh 2.93 trillion (as of Nov 5, 2025)
2. 2025 Year-to-Date Gain: Over KSh 1 trillion added to investor wealth
3. Benchmark Index (NSE All-Share Index): Up 54% from January lows
4. Foreign Investor Participation: Averaging 55% of daily turnover, the highest since 2021
5. Top Movers: Safaricom, Equity Group, EABL, KCB Group, Co-op Bank

Safaricom alone has contributed nearly 40% of the total market recovery, its stock regaining momentum after heavy foreign sell-offs in 2023.

Meanwhile, banking stocks have benefited from easing liquidity pressure and improving loan performance.

What’s Driving the Rally

Several factors are fueling the rebound:

1. Lower Yields and Portfolio Rotation:Investors are shifting away from high-yield government bonds, whose rates have started to decline following reduced domestic borrowing pressure. This rotation is driving capital back to the stock market.
2. Currency Stability:The Kenyan shilling has shown relative stability in Q4, restoring foreign investor confidence after months of volatility.
3. Corporate Earnings Resilience:Blue-chip firms have posted solid interim results, led by banking and telecom sectors, which continue to deliver strong cash flows and dividends.
4. Policy Stability:The Central Bank’s efforts to curb inflation and maintain liquidity have strengthened investor sentiment in Kenyan assets.

“We are witnessing the return of optimism,” said Rina Hicks, operations director at Faida Investment Bank.

“Investors who were sitting on the sidelines are coming back as macroeconomic indicators stabilise.”

Risks Ahead

Despite the upbeat outlook, analysts warn that the rally remains fragile. Global uncertainties, high taxation, and upcoming U.S. interest-rate decisions could trigger renewed volatility.

“We’ve seen promising gains, but we can’t ignore that valuations are rebounding from a low base,” cautioned Ken Gichinga, Chief Economist at Mentoria Economics.

“A sustained recovery will depend on corporate earnings, political stability, and consistent reforms that deepen liquidity.”

Liquidity on the NSE remains thin, with average daily turnover at around KSh 450 million, well below pre-pandemic averages.

Market depth and new listings remain a challenge as companies seek regional diversification and private funding alternatives.

Outlook: Path to KSh 3 Trillion and Beyond

If the rally holds, the NSE could surpass the KSh 3 trillion mark before year-end, a symbolic milestone that would signal restored investor faith after years of turbulence.

With expectations of lower interest rates in 2025, FX stability, and potential IPO activity, including a possible government divestiture program, market watchers see further upside.

“Crossing the three-trillion mark is more than a number; it’s a statement that Kenya’s capital markets are regaining trust,” said Odundo.

“Our focus now is deepening liquidity and attracting new issuers.”

For long-term investors, the message is clear: the Kenyan stock market is finding its voice again, cautious, but increasingly confident.