NSE shares fall sharply, wiping out Ksh336B as CBK flags market pressure

Kenya's financial markets experienced a sharp decline during the week ending September 17, 2026, leading to a significant loss in market capitalization and wiping out Ksh336 billion in value. The Nairobi Securities Exchange (NSE) saw an overall index drop of 4.96%, with the NSE All Share Index falling 4.96%, the NSE 25 Share Index declining 5.85%, and the NSE 20 Share Index decreasing 6.47%.

The market capitalization also decreased by 4.96% to Ksh3.95 trillion. Despite the drop in share prices, trading activity surged, with 178.71 million shares exchanged, a 26.46% increase year-over-year, and equity turnover reaching Ksh9.27 billion, an impressive 44.75% rise. However, the number of equity deals fell by 14.30% to 77,103.

Strong demand for Kenyan government securities persisted, as seen in the Treasury bill auction on September 17, 2026, where investors submitted bids worth Ksh42.7 billion against an advertised Ksh28 billion, a 152.6% performance. Similarly, the 182-day and 364-day Treasury bill rates declined, while the 91-day bill rate increased marginally to 8.784%.

Longer-term government debt also attracted investor interest, with Ksh81.4 billion in bids for reopened 20-year and 30-year Treasury bonds, a 135.7% performance. Global inflation concerns and a stronger US dollar led to increased Eurobond yields, with an average rise of 9.52 basis points during the week. Meanwhile, the Kenya shilling remained stable against the US dollar, trading at Ksh129.62 per dollar on September 17, compared to Ksh129.45 on September 10.

Foreign exchange reserves stood at USD15.088 billion, equivalent to six months of import cover, above the four-month minimum. The money market remained liquid, with commercial banks holding Ksh24.2 billion in excess reserves above the 3.25% cash reserve requirement. Despite the market pressure, remittance inflows from Kenyans abroad increased by 6% year-on-year, reaching USD451.8 million in August 2026.

However, cumulative remittance inflows over the 12 months to August 2026 stood at USD5.013 billion, a 1.3% decrease from USD5.079 billion the same period in 2025. Overall, Kenya's financial system showed a mixed picture, with the shilling and foreign exchange reserves remaining stable, while equities declined and international debt yields rose.