Investor wealth at the Nairobi Securities Exchange (NSE) has crossed Sh4 trillion for the first time in the wake of a sustained rally in blue-chip share prices and the recent entry of Kenya Pipeline Company (KPC) and Family Bank.

The value of all stocks at the NSE stood at Sh4.013 trillion at the close of trading on Monday, having gained Sh20.9 billion on the day.

The bourse hit the new valuation milestone just nine months after it crossed the Sh3 trillion mark for the first time on November 6, 2025, offering investors a return of 33 percent or a Sh1 trillion gain over the period.

This reaffirmed the Nairobi bourse as the shortest route to wealth in an economy that has oscillated between strong and soft growth as investors increasingly turn to passive investments instead of pouring money into startups.

The NSE has been on a bullish run since 2024 after snapping a prolonged bear run that had drained investor confidence in the market.

Since the beginning of 2024, the bourse has added Sh2.54 trillion in valuation, equivalent to a gain of 179 percent.

In the period, it has outperformed other investment assets, including government securities, property, cash deposits and unit trusts, leading to higher demand for shares from investors who are seeking to maximise returns on their capital.

This demand, mainly coming from local investors, has driven up share prices of large stocks that dominate the market, such as Safaricom, Equity Group, KCB Group and Cooperative Bank of Kenya, by between 29 and 44 percent since the beginning of this year.

Higher dividends have also prompted demand in the stock market, particularly from local institutional investors, helping it shrug off foreign investor sales caused by global jitters that followed the Iran war.

The two new listings of KPC in March and Family Bank in May, which have added a combined Sh222.6 billion in new wealth to the market, have boosted the market valuation.

“Some of the drivers are broadly strong performance in key sectors such as banking, whose index has jumped by 33 percent this year, the revival of listings on the exchange and announcements of key transactions involving Absa Bank Kenya, Safaricom and NCBA Group, which were priced at a premium,” said Melodie Ndanu, a research analyst at Standard Investment Bank.

“We have also seen reallocation of capital to equities by institutional investors as government yields come down, as well as increased retail investor participation via digital platforms.”

By virtue of their large valuations, the top blue chips have been the biggest drivers of the NSE’s valuation gain.

Safaricom, the largest listed firm at the NSE, has added Sh330.5 billion in its market cap -- the measure of investor wealth -- in the year-to-date, giving the company a valuation of Sh1.47 trillion. The company’s share price has gained 29.1 percent to Sh36.60 since December 31, 2025.

Safaricom has accounted for nearly a third of the NSE’s Sh1.07 trillion gain in market capitalisation in 2026.

Equity and KCB have added Sh74.5 billion and Sh65 billion, respectively, in valuation this year, closing at Sh326.4 billion and Sh276.4 billion on Monday. Co-operative Bank has gained 44.3 percent or Sh62.2 billion this year, giving the lender a valuation of Sh202.7 billion.

The four firms, together with EABL, account for 62 percent of the NSE’s investor wealth.

They all reported higher dividends for the 2025 financial year, boosting their attractiveness to investors.

Safaricom’s payout rose to Sh2 per share for the year ended March 2026, from Sh1.20 in the previous year, while Equity increased its distribution to Sh5.75 per share from Sh4.25 in 2024.

KCB raised its total dividend to Sh7 per share (inclusive of a Sh2 per share special dividend) from Sh3 in 2024, while Co-operative Bank raised its full-year dividend to Sh2.50 per share from Sh1.50 previously.

Absa Kenya and I&M Group have added 37 percent or Sh49.4 billion and 61 percent or Sh45.3 billion this year, giving them valuations of Sh183.6 billion and Sh119.2 billion as at the close of trading on Monday.

Stanbic has added Sh37.6 billion to Sh115.7 billion, following a 48 percent increase in share price to Sh292.75.

Among the non-banking firms, Britam Holdings has added Sh22.9 billion and Kenya Power Sh15.8 billion to hit valuations of Sh46 billion and Sh42.3 billion, respectively.

These gains have left the equities market unchallenged as the top-performing asset class this year.

Read: Wealthy investors book Sh40bn gains on NSE rally

Treasury bonds issued in the last seven months offered investors annual interest payments of between 12 percent and 14.2 percent, before withholding taxes of 10 to 15 percent on the interest.

Investors in Treasury bills have earned between 7.4 percent and 9.2 percent in annualised interest as rates remained low despite the rise in inflation in the second quarter of the year due to higher energy prices on account of the war in Iran.

Those opting to keep cash in fixed deposit accounts in banks saw their rate fall to 6.84 percent in June 2026 from 7.03 percent in December 2025, as the Central Bank of Kenya (CBK) lowered the base rate to 8.75 percent from 9.0 percent in December.

In the property sector, rental and sales prices in Nairobi and its satellite towns were in the single digits of up to 5.1 percent in the first quarter of the year as demand for new units remained muted due to challenging economic conditions.

On a 12-month basis, the rental and sale prices grew by 4.5 percent and 1.1 percent respectively as at March, as per data compiled by real estate firm HassConsult.

Returns from investments made through collective investment schemes have also trailed equities, owing to the falling returns in their underlying assets such as Treasury bills, bonds and cash deposits.

Shilling-denominated money market funds are now paying annual rates of between 5.2 percent and 11.2 percent, depending on the fund manager.

Collective investment schemes have risen in popularity as investors open up to professional investment services, reaching Sh851.7 billion in assets under management from Sh164.3 billion three years earlier.

Money market funds account for the largest share of unit trust assets at 51.9 percent, ahead of special funds at 23.9 percent and fixed income funds at 23.4 percent.

→ cmwaniki@ke.nationmedia.com

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