The Nairobi Securities Exchange (NSE) started 2025 on a strong note, with multiple indices and key stocks recording remarkable gains during the first trading session of the year. Investor confidence surged as market capitalization grew by KSh 16 billion, buoyed by positive performances from top-listed companies.

Kenya Power Leads the Pack with Remarkable Gains

Kenya Power emerged as the standout performer on January 3, 2025, posting a staggering 21.25% increase to close at KSh 5.42. This surge reflects growing investor optimism about the company’s turnaround strategy and operational improvements. Over the past year, Kenya Power has been implementing initiatives to reduce operational inefficiencies and enhance revenue collection, a move welcomed by both local and foreign investors.

Key factors contributing to Kenya Power’s growth include:

1. Debt Restructuring: The company has aggressively pursued debt restructuring, which has significantly reduced its financial burdens.
2. Adoption of Renewable Energy: As Kenya continues to prioritize renewable energy, Kenya Power has positioned itself as a key player in solar, wind, and geothermal energy distribution.
3. Government Support: Backing from the government, including subsidies and policy reforms, has boosted investor confidence.

Strong Performances by Other Gainers

Kenya-Re

Kenya-Reinsurance Corporation (Kenya-Re) secured the second spot among top gainers, with its share price climbing by 16.53% to close at KSh 1.41. The company has benefited from increasing demand for insurance and reinsurance services, driven by growth in the real estate and healthcare sectors. Kenya-Re’s consistent dividend payments have also made it an attractive choice for investors seeking stable returns.

Nation Media Group

Nation Media Group posted a solid 13.79% gain, closing at KSh 14.85. The company has been diversifying its revenue streams by investing in digital transformation and launching new subscription-based platforms. With a growing audience in East Africa and a focus on delivering high-quality journalism, Nation Media is well-positioned to capitalize on the increasing demand for credible news in the region.

HF Group

Housing Finance (HF) Group recorded a 12.06% rise to close at KSh 4.74. The company’s stock performance is tied to renewed interest in affordable housing projects in Kenya, spurred by government initiatives under the Affordable Housing Programme. HF Group’s strategic partnerships with developers and financial institutions have also strengthened its market position.

Cooperative Bank of Kenya

Rounding out the top five gainers was Cooperative Bank of Kenya, with an 11.01% increase to close at KSh 17.65. The bank’s robust financial performance and focus on digital banking solutions have driven its stock upward. Cooperative Bank has been a leader in extending credit to small and medium-sized enterprises (SMEs), a critical sector of Kenya’s economy.

Indices and Market Performance

The overall market sentiment was upbeat, as reflected by gains across all major indices:

1. NSE All Share Index: Climbed by 1.02 points to settle at 126.36.
2. NSE 20 Share Index: Rose by 30.30 points to close at 2,088.97.
3. NSE 25 Share Index: Increased by 25.80 points to end at 3,483.67.

Market Capitalization and Turnover

The total market capitalization surged by KSh 16 billion, reaching KSh 1.98 trillion. Investor activity also saw a notable uptick, with 22.34 million shares traded, representing an increase of over 13.2 million shares compared to the previous session. Equity turnover rose by KSh 91.37 million to close at KSh 206.84 million, underscoring heightened investor participation.

Government Securities: Treasury Bills Auction Results

In parallel with the stock market’s positive performance, the Central Bank of Kenya (CBK) announced the results of its Treasury bills (T-bills) auction held on January 6, 2025. The auction saw robust participation, with the CBK accepting bids totaling KSh 15.68 billion, surpassing initial targets.

T-Bill Subscription Highlights

1. 91-Day T-Bills: Oversubscribed, with CBK accepting KSh 7.98 billion against an initial offer of KSh 4 billion.
2. 182-Day T-Bills: Subscriptions totaled KSh 5.10 billion, reflecting stable demand.
3. 364-Day T-Bills: Attracted bids amounting to KSh 2.60 billion, offering the highest return with a weighted average interest rate of 11.3711%.

The auction results indicate strong investor appetite for short-term government securities, driven by attractive yields and Kenya’s improving macroeconomic environment.

Broader Economic Context

Renewed Investor Confidence

The positive start to 2025 on the NSE reflects growing confidence in Kenya’s economic outlook. Factors contributing to this sentiment include:

• Stabilizing Inflation: The Central Bank’s monetary policies have effectively curbed inflation, creating a more favorable environment for investment.
• Infrastructure Development: Ongoing projects in transport, energy, and telecommunications are boosting economic activity and investor interest.
• Strong Fiscal Management: Government efforts to streamline spending and enhance revenue collection have reassured markets about Kenya’s fiscal stability.

Regional and Global Factors

Kenya’s stock market performance aligns with broader trends in emerging markets, which have been attracting increased attention from global investors seeking higher returns. Additionally, Kenya’s strategic position as a gateway to East Africa makes it an attractive destination for both regional and international investors.

Sectoral Highlights

Energy Sector

Kenya Power’s strong performance underscores the critical role of energy in driving economic growth. The company’s focus on renewable energy aligns with Kenya’s Vision 2030 goals and global efforts to combat climate change.

Real Estate and Banking

The gains by HF Group and Cooperative Bank reflect robust activity in Kenya’s real estate and banking sectors. Government initiatives, such as affordable housing projects and SME financing, have spurred growth in these areas, creating opportunities for both businesses and investors.

Media and Communication

Nation Media’s gains highlight the evolving media landscape in Kenya. The shift toward digital platforms and subscription-based models is reshaping how media companies generate revenue and engage with audiences.

Conclusion: A Promising Start to 2025

The Nairobi Securities Exchange has kicked off 2025 on a high note, with significant gains across key stocks and indices. Kenya Power, Kenya-Re, Nation Media, HF Group, and Cooperative Bank have set the tone for a bullish year ahead.

As Kenya continues to implement policies aimed at economic growth and stability, the NSE is likely to remain a key indicator of the country’s financial health and investor sentiment. The combination of strategic government initiatives, corporate resilience, and favorable macroeconomic conditions positions Kenya as a vibrant hub for investment in 2025 and beyond.

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photo source: Google

By: Montel Kamau

Serrari Financial Analyst

7^th January, 2024