Investors on the Nairobi Securities Exchange (NSE) gained Sh168.8 billion in the last one week, pushing the value of listed shares to an all-time high, on the back of positive progress in peace talks between Iran and the United States.
Market capitalisation – the measure of investor wealth – rose by 4.8 percent to a new all-time high of Sh3.63 trillion, largely driven by the return of foreign investors who had previously exited the Nairobi bourse as fears of a prolonged Iran war fanned inflation concerns.
An interim peace deal between the two warring nations saw the Strait of Hormuz reopened, albeit temporarily, easing inflationary concerns that had driven investors to dollar assets in the US.
Foreign investors were net buyers of Sh432 million at the NSE bourse, which saw large counters such as Safaricom, Absa Bank, Cooperative Bank, East African Breweries Limited (EABL) and KCB Group drive a gain of over Sh168.8 billion in the last week.
“We saw average share prices rise 4.8 percent, driven mainly by Safaricom and the banking sector. Positive developments in global geopolitics saw improved foreign participation in the telecommunications sector, which is generally Safaricom, and the banking counters,” Shadrack Manyinsa, a research analyst at Pergamon Investment Bank said.
Safaricom added Sh64.1 billion in valuation to Sh1.3 trillion on Monday, at a share price of Sh32.75.
The wealth of investors holding shares in Absa Bank rose Sh23.6 billion during the week; Cooperative Bank added Sh17.6 billion, KCB (Sh15.3 billion) and EABL up Sh13.4 billion.
The progress in peace talks saw global crude prices ease 1.9 percent to $79.07 a barrel, far away from its May peak of $126.41.
The drop in fuel prices helps ease inflationary fears which have been a headache for governments and investors across the globe. The Kenyan government has been forced to step in with fuel subsidies to protect the citizens from inflationary pressures.
Positive sentiments around the talks were, however, overshadowed by Tehran’s announcement on Saturday that it had closed the Strait of Hormuz again, claiming US and Israel had broken the terms of the discussions.
Analysts, however, reckon the gains at the NSE are expected to hold as they are also attributable to corporate transactions.
“The true position of the talks is not yet to be known, but on the stock market we have an outlook of 12 to 15 percent average growth by end of year driven by corporate transactions,” said Mr Manyinsa.
The stock market had recorded a 9.8 percent average year-on-year growth as at the end of May.
Some of the corporate activities driving share prices include the announcement by South African-based Absa Group Limited that it plans to raise its stake in the Kenyan subsidiary to 85 percent from the current 68.5 percent.
The bank’s share has gained 5.5 percent since Thursday following disclosures of the group’s plan to raise its stake by buying available shares in the market at a premium price of Sh34.5. This will see the South African firm spend approximately Sh31 billion to acquire the extra stake.
The gains on the EABL counter were attributed to the dismissal of court cases that had challenged the sale of Diageo shareholding to Japan’s Asahi Group Holdings.
The High Court dismissal last week paved the way for completion of the 65 percent sale of Diageo’s 65 percent stake to Asahi Group in an estimated Sh300 billion deal. A fresh court action has, however, since frozen the EABL-Diageo deal following a petition by Christine Irungu, who alleges that minority shareholders were denied material information when Diageo increased its stake in the brewer from about 50.03 percent to 65 percent through a 2022-2023 tender offer before pursuing a sale.
Investor interest in listed banks is driven by the sector’s good financial results for the year ended December 2025 and in the first quarter of 2026. The lenders recorded 18 percent growth in profits before tax, signalling another bumper year for the financial sector.
The listing of Family Bank today is expected to further drive the market capitalisation up and increase the influence of the banking sector on the direction of the stock market. Family Bank is listing by introduction at Sh18 per share, which values the mid-sized lender at Sh29.9 billion.
Other corporate activities in the banking sector include the purchase of a 66 percent stake in NCBA Group by South African lender Nedbank Group in a Sh110 billion transaction.
South African Vodacom Group is also in the process of purchasing a 15 percent stake in Safaricom from the government for Sh204.3 billion and a five percent stake from its British parent Vodafone Group Plc for Sh68.1 billion.
