Kenya’s financial markets bounced back sharply in the third quarter of 2025, shrugging off global uncertainty and a wave of foreign investor exits to record their best rally since 2021.
Fresh figures from the Capital Markets Authority (CMA) show that total investor wealth grew by about Sh360 billion between July and September.
The Nairobi Securities Exchange’s (NSE) market value rose to Sh2.78 trillion, up from Ksh 2.42 trillion in the previous quarter, marking a 15 per cent jump.
The rebound came even as international investors pulled out billions, unsettled by local political protests and global conflicts such as the Israel-Iran and Russia-Ukraine wars.
Despite this, Kenyan investors stepped in to steady the market, taking advantage of improved share prices and new policy reforms.
According to CMA’s quarterly review, foreign outflows rose sharply to Sh3.84 billion from just Sh177 million a few months earlier.
“Foreign investor participation at the end of the third quarter of 2025 averaged 30 per cent, a decrease from 46.68 per cent in the previous quarter, with the market recording an outflow of Sh3.9 billion compared to Ksh 177 million between April and May 2025,” the regulator reported.
Local investors’ renewed activity helped offset the exits, lifting total market turnover by 60 per cent from the previous quarter. Analysts say recent reforms have made trading more accessible and attractive to smaller investors.
The equities market led the charge, registering double-digit gains across all major indices for the second consecutive quarter. The NSE 20 Index climbed 21.8 per cent to 2,972.64 points, while the NASI surged 35 per cent to 176.7 points.
CMA linked the growth to the introduction of single-share trading, which lets investors buy even one share instead of the former 100-share minimum. This move aims to draw in more retail investors and deepen liquidity.
“The quarter underscores Kenya’s continued transition toward an innovative, inclusive, and globally connected capital market,” CMA’s acting director of policy and market development, Samuel Kamunyu Njoroge, said.
“The democratisation of investing is finally here. Every Kenyan can now own a share of the nation’s growth,” CMA Chief Executive Wyckliffe Shamiah added.
He said the regulator hopes to expand Kenya’s retail investor base to nine million by 2029.
The bond market also thrived during the quarter. The government raised Sh250 billion through Treasury bonds, attracting bids worth Ksh 713 billion, nearly triple the amount sought. Turnover in the secondary bond market hit Sh2 trillion by September, already surpassing the full-year figure for 2024.
Investors continued to favour infrastructure bonds, drawn by their stability and long-term returns. Corporate bond trading also came back to life, leaping from just Ksh 1.2 million to Ksh 105 million in turnover.
Collective Investment Schemes posted record growth as more Kenyans sought managed investment options through digital platforms. Assets in the segment grew by 53 per cent in six months to reach Ksh 596.3 billion by mid-year.
The period also saw new listings that signalled a more mature and diversified market. The Satrix MSCI World Feeder Fund, the first global equity Exchange Traded Fund (ETF) at the NSE, now gives local investors access to over 1,500 international firms in 23 developed economies.
Despite the strong performance, the CMA warned that the market remains concentrated, with Safaricom and top banks accounting for nearly two-thirds of the total value. The authority said efforts to promote diversification and investor education will be key to sustaining the momentum.
Kenya also launched its first Asset-Backed Security, the Ksh 44.7 billion Linzi FinCo bond, to help fund the construction of the Talanta Sports City Stadium. The 15-year tax-free bond carries a 15.04 per cent annual return, marking a new path for private capital in public projects.
