Nairobi Markets Roundup: NSE Rally, Forex Stability & Crypto Adoption

By benadeta mwaura - Reporter

Kenya, January 16 2026 - Kenya’s stock market has continued its bullish momentum into early 2026 after a remarkable run through 2025: The Nairobi Securities Exchange (NSE) crossed a major milestone by closing above KSh 3 trillion in market capitalization, a first for the bourse, driven by strong performance from blue-chip stocks such as Safaricom PLC, KCB Group and Equity Bank.

This rally reflected rising investor confidence and a meaningful rotation into equities from fixed- income instruments. In dollar-terms, the NSE delivered the second-highest returns in Africa in 2025, with a 52.2% gain tracked by the MSCI frontier and emerging markets index, placing only behind Egypt among major African exchanges.

Total investor wealth expanded by over KSh 1 trillion in 2025, with a large portion of gains earlyin the year attributed to share price appreciation across multiple sectors from energy to banking. However, markets have not been uniformly higher: profit-taking in later 2025 saw valuations retreat from the all-time high above KSh 3 trillion to about KSh 2.97 trillion, as some investors crystallised gains after the strong rally.

Sector dynamics:

The banking sector now has its own NSE Banking Sector Index to help investors track performance across 11 listed banks, a sign of increasing product sophistication on the bourse. Safaricom, still the largest stock by market weight and a macro proxy for Kenya’s broader growth, entered a consolidation phase after strong earnings and ongoing corporate activity tied to government share sales and fintech expansion.

Kenyan Shilling & Forex Movements, Relative Stability

The Kenyan shilling (KES) showed relative resilience against the U.S. dollar in early 2026, trading around 128.95 KES per USD, a modest improvement compared with levels seen in 2024. Several local drivers have helped support the shilling, including: Strong diaspora remittances, which bolster forex reserves and liquidity.

In mid-2025, remittances exceeded KSh 650 billion over 12 months, contributing to shilling support against global currency headwinds. This relative stability has helped maintain investor confidence in Kenya’s capital markets and limited extreme FX volatility in Nairobi trading desks.

Commodities Exposure & Gold via NSE

Local investors have tapped into commodities exposure, particularly gold, through Kenya’s first and still prominent gold-linked ETF, the Absa NewGold ETF, which tracks global gold prices in Kenyan shillings: The NewGold ETF experienced strong gains in 2025, rising over 60% year-to-date, driven by a global gold price rally that saw safe-haven demand surge amid economic uncertainty.

On some trading days, the gold ETF’s turnover even outperformed major NSE stocks, illustrating growing investor appetite for commodity-linked instruments as a hedge against market volatility. The presence of such ETF options has helped deepen Nairobi’s market by offering alternatives to traditional equities and fixed income, although the number of ETF products remains limited.

Crypto and Digital Asset Adoption, Growing Regional Role

Kenya has not been left out of the digital asset revolution: According to a 2025 report, Kenya ranks 28th globally in digital asset adoption, positioning itself fourth in Africa, ahead of markets like South Africa in some metrics, as usage of stablecoins and other digital assets rises.

This trend reflects broader regional dynamics where stablecoin adoption in Sub-Saharan Africa is now among the highest globally, as users seek less volatile instruments and remittance alternatives.

Broader Market Signals in Nairobi

Equity market participation remains skewed, with pension funds holding large liquid positions in bonds and government securities, waiting for potential corrections before deploying capital into equities, a dynamic that could influence early-2026 market movements.

Regulatory innovations such as lifting the 100-share trading limit at the NSE are expected to lower entry barriers for retail investors, encouraging wider participation and potentially boosting liquidity in Nairobi markets. Access to global markets has been expanded through listings such as the Satrix MSCI World Feeder ETF on the NSE, allowing local investors to gain exposure to international equities alongside domestic stocks.

What This Means for Nairobi Investors in 2026

Equities: After a strong 2025 rally, Nairobi’s equities market enters 2026 with a mix of optimism and caution, valuations have seen impressive gains, but profit-taking and liquidity constraints could temper short-term growth. Forex: The Kenyan shilling’s relative strength provides comfort for importers and foreign investors alike, stabilising trade flows and FX expectations. Traders should watch remittance trends and CBK policy decisions for future shifts.

Commodities & Crypto: Commodity links via local gold ETFs give investors a natural hedge against volatility, while Kenya’s rising crypto adoption signifies increasing sophistication and diversification in investor behavior. As global and local economic conditions evolve, Nairobi’s financial markets appear poised to balance continued growth with deeper market structures and broader investor participation.