NSE Hits Record Ksh4.12T Market Cap Despite Sharp Trading Slump

October 27, 2026 Majira Media

NAIROBI, KENYA — The total value of companies listed on the Nairobi Securities Exchange (NSE) hit a record Ksh4.12 trillion at the end of the third quarter of 2026, even as share trading volume experienced a dramatic slowdown, according to the latest statistical report from the Capital Markets Authority (CMA).

The market capitalization grew by nearly Ksh360 billion (9.57%) between July and September 2026, rising from Ksh3.76 trillion recorded at the end of June. Compared to the corresponding period in 2025, when market cap stood at Ksh2.78 trillion, the bourse recorded a massive 48.02% year-on-year surge.

However, the rapid appreciation in share prices stood in sharp contrast to a steep drop in trading activity, presenting a mixed picture of Kenya’s equities market.

Benchmark Indices Rally Across the Board

The gain in market capitalization was primarily anchored by strong upward momentum in benchmark indices during Q3 2026:

NSE 20 Share Index: Rose by 14.95% to close at 4,316.96 points (up from 3,755.44 points in June). Year-on-year, the index recorded a 45.22% surge from 2,972.64 points in September 2025.
Nairobi All Share Index (NASI): Advanced by 9.57% during the quarter to reach 245.60 points, representing a 38.96% annual increase from 176.74 points.

Sharp Decline in Equity Turnover

Despite the surging market value, equity turnover plummeted by over 70% quarter-on-quarter. Total traded value dropped from a record high of Ksh233.55 billion in Q2 (ending June 2026) to Ksh72.72 billion in Q3.

Monthly Breakdown of Q3 Turnover

July 2026: Traded value contracted sharply to Ksh16.15 billion.
August 2026: Activity rebounded slightly to Ksh27.66 billion.
September 2026: Turnover reached Ksh28.91 billion.

While Q3 performance was down significantly compared to the exceptionally active second quarter, overall equity turnover remained higher than in previous years—up 57.32% compared to the Ksh46.23 billion traded in Q3 2025.

Foreign Capital Outflows and Bond Market Strength

Foreign Investor Capital Flight

The liquidity crunch in equities was exacerbated by sustained capital withdrawal by foreign investors. During the three-month period, net foreign capital outflows reached Ksh5.7 billion, as foreign sales continued to outweigh purchases.

Fixed Income & Government Bonds Soar

As interest in equities moderated, investors turned heavily toward government debt:

Bond Market Turnover: Increased by nearly 35% quarter-on-quarter to Ksh837 billion.
Treasury Bond Issues: The government successfully raised Ksh585 billion through Treasury bond issuances in Q3.
Treasury Bills: Primary auctions continued to see robust demand. In the October 22 auction, bids reached Ksh28.8 billion against an advertised target of Ksh28 billion, driving yield reductions across 91-day, 182-day, and 364-day tenors.

Recent October Market Trends

Data from the Central Bank of Kenya (CBK) Weekly Bulletin indicates that the rally cooled slightly moving into October 2026. For the week ending October 22:

Market capitalization contracted by 0.38% to Ksh3.996 trillion.
NASI eased by 4.56%, while the NSE 25 and NSE 20 indices recorded modest drops of 0.51% and 0.39%, respectively.
Weekly equity turnover saw a temporary surge, boosted by a single major transaction in Kenya Power and Lighting Company (KPLC) shares worth Ksh42.5 billion.

Outlook & Financial Sector Products

To help improve liquidity and broaden retail investor access, the CMA recently approved a new structured investment product. The fund enables investors to gain diversified exposure to 11 listed banking institutions through a single vehicle, offering a simplified route into Kenya’s banking sector.

While fundamental valuations across the NSE remain robust, analysts note that sustaining long-term growth will depend on restoring trading liquidity and stemming foreign capital outflows.