Kenya’s equity market experienced a notable rally during the week ending February 17, 2025, with the Nairobi All Share Index (NASI) climbing 5.2%, driven primarily by renewed foreign investor participation. Total market turnover reached approximately $16 million, marking a significant rise in activity compared to previous weeks. Foreign investors accounted for 59.5% of total trading during the period, underscoring a shift in sentiment towards Kenyan equities.
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The rebound in foreign inflows was reflected in the performance of key blue-chip stocks. Safaricom was a major contributor to the week’s gains, accounting for more than half of the total market turnover and posting a weekly price increase of 3.9%. The company’s improved investor sentiment followed its interim dividend announcement, which reaffirmed its strong earnings outlook. Other stocks that saw notable movement included Uchumi, which rose by 10%, and Absa Bank, which recorded a 2.4% gain.
The overall rally points to growing investor confidence in Kenya’s economic recovery, supported by a stable macroeconomic outlook and improved corporate performance across several sectors. The renewed interest in equities comes despite ongoing competition from fixed-income securities, with government bonds continuing to offer attractive yields. However, the equity market’s upside potential, driven by strong earnings and dividend returns, appears to be drawing investors back to listed shares.
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Although foreign investor participation had dipped earlier in the year, the recent surge to nearly 60% of total activity signals a positive recalibration. It also reflects broader interest in Kenya’s telecommunications, banking, and consumer sectors, which continue to anchor the country’s capital market performance. Analysts note that foreign investors are becoming increasingly selective, favoring stocks with consistent earnings and sound corporate governance.
As the market heads into the next earnings cycle, sustained momentum will depend on upcoming corporate results, dividend declarations, and broader economic indicators. Continued foreign participation could enhance market liquidity and valuation levels, strengthening Nairobi’s position as a leading financial center in East Africa.
