The Nairobi Securities Exchange extended its September correction in the week ended September 18, losing KSh102.53 billion in market capitalisation as foreign investors increased selling and major banking stocks retreated.
LIVENSE market summarySee NSE data →Market capitalisation declined 2.50% from KSh4.107 trillion to KSh4.004 trillion, leaving the exchange only marginally above the psychologically significant KSh4 trillion level. The NASI recorded an identical 2.50% weekly decline to 238.61, while losses were deeper across several of the exchange’s other major indices.
The decline occurred even as trading activity increased sharply, suggesting that the week was characterised not by declining investor participation but by heavier turnover accompanied by substantial selling pressure.
Key Overview
- NSE market capitalisation fell KSh102.53 billion to KSh4.004 trillion during the week ended September 18.
- NASI declined 2.50% to 238.61, extending its September loss to 5.06%.
- The market had lost KSh213.42 billion in value since the end of August.
- The Banking Index fell 4.49%, making financial stocks a major source of weakness.
- Foreign investors recorded a KSh2.46 billion net outflow during the week.
- Equity turnover increased 41.3% to KSh9.38 billion despite falling share prices.
- KCB declined 7.44%, while Equity Group lost 3.43%.
- The U.S. Federal Reserve raised its benchmark target range by 25 basis points to 3.75%–4.00% during the same week.
NSE Loses More Than KSh100 Billion in One Week
The sell-off marked the NSE’s second consecutive weekly decline, pushing the market further away from the highs reached before the September correction began.
The weekly market decline reduced total market capitalisation to KSh4.004 trillion, compared with KSh4.107 trillion one week earlier. Since the end of August, the exchange had lost approximately KSh213.42 billion in market value.
Broad market indices reflected the weakness. NASI fell 2.50%, while the NSE 20 Share Index declined 4.06%. The NSE 25 lost 3.45%, the NSE 10 retreated 3.32%, and the Banking Index fell 4.49%.
NASI was consequently down 5.06% for September by the close of trading on September 18.
Despite the decline, the exchange remained slightly above the KSh4 trillion market-capitalisation threshold, a level it had surpassed during the strong equity rally earlier in 2026.
Foreign Selling Intensifies
Foreign portfolio activity was one of the strongest sources of selling pressure during the week.
Foreign investors purchased shares worth approximately KSh986.54 million while selling KSh3.45 billion, resulting in a net foreign outflow of KSh2.46 billion.
That represented the second-largest weekly foreign outflow recorded in 2026, behind the roughly KSh2.60 billion withdrawn during a week in March.
September’s cumulative net foreign outflow consequently increased to approximately KSh3.70 billion, making it the second-heaviest month for foreign selling this year after the KSh4.28 billion recorded in March.
Domestic investors nevertheless remained the dominant participants in the market, accounting for 76.36% of total turnover during the week.
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Trading Activity Rises Despite Falling Prices
One notable feature of the correction was the sharp increase in trading.
Equity turnover rose 41.3% to KSh9.38 billion, while the number of shares traded increased 33.7% to approximately 188.11 million shares.
EABL was the most actively traded counter by value, generating approximately KSh2.65 billion in turnover. KCB followed with KSh1.53 billion, while Safaricom recorded approximately KSh1.42 billion.
LIVENSE market summarySee NSE data →Higher turnover during a falling market can reflect investors actively repositioning portfolios rather than simply withdrawing from trading altogether. In this instance, substantial foreign sales contributed to that elevated activity.
Banking Shares Carry Much of the Pressure
Banking stocks were among the largest contributors to the week’s weakness.
KCB Group fell 7.44% to KSh87.00, while Equity Group declined 3.43% to KSh98.50. I&M Group moved against the broader banking trend, gaining 1.26% to KSh80.25.
Safaricom also resisted the wider decline, edging 0.28% higher to KSh35.30.
Across the broader market, Britam recorded the largest weekly decline at 16.26%, followed by Africa Mega Agricorp at 14.03%, Olympia Capital at 13.72%, Flame Tree Group at 10.04% and HF Group at 9.52%.
Kakuzi led the week’s gainers with a comparatively modest 2.94% increase, highlighting how heavily market performance was skewed toward declining counters.
Higher Global Rates Add Another Risk Factor
The local correction unfolded during a tougher global interest-rate environment.
On September 16, the U.S. Federal Reserve raised its policy target by 25 basis points, taking the federal funds target range to 3.75%–4.00%.
Higher U.S. interest rates can increase the relative attractiveness of dollar-denominated assets and raise financing costs for emerging markets. However, the scale of foreign selling at the NSE cannot be attributed solely to the Fed decision, as portfolio flows are influenced by valuations, currency expectations, individual stock positions and broader global risk appetite.
For the NSE, the immediate question is whether the KSh4 trillion market-capitalisation level can hold as September progresses. After two consecutive weekly losses and more than KSh213 billion erased since August ended, foreign-flow trends and the performance of heavyweight banking stocks are likely to remain important indicators of the market’s near-term direction.
Sources: Kenyan Wall Street / Nairobi Securities Exchange / Federal Reserve / Hisa
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