Kenya’s Nairobi Securities Exchange delivered an exceptional performance in 2024, marked by record profit expansion, soaring trading volumes, and strategic market infrastructure enhancements that position the exchange at the forefront of African capital market development. The NSE reported profit after tax of KSh 116.3 million for the year ended December 31, 2024, representing a remarkable 500% increase from KSh 18.4 million in 2023. This extraordinary profit expansion reflects both improved operational efficiency and the underlying strength of Kenya’s capital markets, as increasing trading volumes and new listings have expanded the revenue base supporting exchange operations. The profit trajectory demonstrates that the NSE has successfully transitioned from a struggling regional exchange confronting structural challenges to a profitable, growth-oriented institution capitalizing on Kenya’s financial market development.
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Trading volume dynamics have been equally impressive, with equity market turnover rising 20.10% to KSh 105.97 billion, while bond market turnover achieved the extraordinary figure of KES 1.5 trillion, representing a 140% year-on-year increase. The bond market growth substantially outpaced equity market expansion, reflecting the exceptional surge in government securities trading that has characterized Kenya’s fixed income landscape in 2024-2025. The divergence between bond and equity market growth illustrates the contemporary appeal of fixed income instruments and the structural shift toward government securities driven by the extraordinary yields available during the monetary tightening phase. As interest rates have declined, bond market growth may moderate, yet the established trading infrastructure and investor base suggest that elevated bond market activity will persist.
Equity market trading volumes expanded 32% to 4.93 billion shares in 2024, demonstrating renewed investor engagement with stock markets despite the complexity of global equity dynamics and Kenya-specific macroeconomic challenges. The volume expansion suggests that the NSE has successfully attracted both retail and institutional investor participation, with improved trading infrastructure and digital platforms facilitating access. The Nairobi Securities Exchange has benefited from the rise of mobile trading applications and digital investment platforms enabling younger, tech-savvy investors to engage with equity markets more conveniently than traditional brokerage channels. This technological democratization of stock market access has expanded the investor base and contributed to trading volume expansion.
Market capitalization surged to KSh 1.9 trillion from KSh 1.4 trillion, representing a substantial increase in the total value of listed company equity. The capitalization expansion reflects both price appreciation of listed equities and the addition of new companies to the exchange through initial public offerings and capital raise activities. The NSE’s 2025-2029 strategic plan focused on market revitalization and technology optimization has created initiatives to attract new listings and enhance investor engagement. The capital markets development ambitions include expansion of the number of listed companies from the current base, diversification of sector representation, and attraction of larger corporations historically accessing capital primarily through bank financing.
Derivatives market trading expanded 165% in 2024, reflecting the growing sophistication of Kenyan investors and the development of hedging instruments enabling risk management. Derivatives including equity index futures, currency forwards, and interest rate swaps are enabling institutions and sophisticated individual investors to hedge exposures and speculate on economic developments. The expansion of derivatives trading indicates that Kenya’s capital markets are maturing beyond simple equity and fixed income trading toward sophisticated risk management and tactical trading instruments. However, the relatively modest absolute volumes in derivatives markets suggest significant scope for expansion as investor sophistication increases and market infrastructure matures.
The relationship between the Nairobi Securities Exchange and global equity indexes has become increasingly important to Kenya’s capital markets narrative. The NSE announced the addition of Co-operative Bank of Kenya to the MSCI Frontier Markets Index, bringing the total Kenyan companies in this important global index to five: Safaricom PLC, Equity Group Holdings, KCB Group PLC, East Africa Breweries PLC, and Co-operative Bank of Kenya. MSCI index inclusion provides enormous marketing benefit to included companies, as global index funds tracking MSCI indexes are required to hold these securities. The index inclusion results in foreign investment inflows to these companies, improving liquidity and reducing bid-ask spreads. The inclusion of additional Kenyan companies in global indexes should result in sustained foreign investor interest and improved capital market accessibility.
Technology infrastructure improvements have been critical drivers of NSE performance improvements. The exchange has upgraded its trading and settlement systems, implemented same-day settlement for matched deals, and reduced tick sizes enabling tighter pricing on traded securities. These technical enhancements have lowered trading friction and enabled faster execution, improving the overall investor experience. The planned introduction of a central counterparty clearing system in 2026 is expected to further enhance market efficiency by reducing settlement risk and enabling netting of obligations across market participants. These infrastructure investments represent the NSE’s commitment to maintaining competitive position within regional and global capital markets.
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Profit expansion at the NSE reflects revenue diversification beyond traditional listing and trading fees. The exchange has developed ancillary revenue sources including data services, market information products, and connectivity services, creating multiple revenue streams supporting profitability. The diversification of revenue sources provides stability against cyclical trading volume fluctuations and reduces dependence on any single market segment for profitability. As the NSE continues to develop technology and data services, revenue diversification should continue supporting profitability even if trading volumes moderate from their 2024 peaks.
Bond market growth has been particularly consequential to NSE financial performance and market development. The extraordinary growth in government securities trading has generated substantial trading fee revenue while demonstrating investor appetite for fixed income instruments. The bond market’s integration with the equity market through the unified NSE trading platform has enabled efficient price discovery and investor participation across both asset classes. However, the concentration of bond market growth in government securities rather than corporate bonds represents a potential concern regarding market structure, as the limited universe of corporate bond issuers may constrain long-term bond market development.
Sector composition of listed companies has historically concentrated in banking, financial services, and telecommunications, creating exposure concentrations that merit monitoring. The addition of new companies across diverse sectors would enhance market breadth and investor diversification options. The NSE’s strategic initiatives targeting new listings from growth sectors including technology, renewable energy, and consumer goods suggest recognition of the need for sector diversification. However, the realities of Kenya’s corporate landscape, where large corporations often remain private or partially private, may constrain the universe of potential IPO candidates.
Foreign investor participation in Kenya’s capital markets experienced a moderation in 2024, with net selling pressure decreasing substantially from the prior year’s extreme outflows. Foreign investors maintained a net selling position of USD 16.9 billion in 2024, representing an 81.6% improvement from the USD 92.0 billion selling in 2023. The improvement in foreign investor sentiment suggests renewed confidence in Kenya’s economic trajectory and currency stability. The MSCI index inclusions and improved macroeconomic conditions should support sustained foreign investor engagement, though global interest rate dynamics and broader emerging market capital flows remain important influences on foreign demand.
The outlook for the NSE in 2025-2026 appears constructively anchored to the exchange’s strategic initiatives and Kenya’s underlying capital market fundamentals. The 2025-2029 strategy emphasizes market revitalization, technology optimization, and investor engagement initiatives that should support continued growth. However, the concentration of recent growth in fixed income markets driven by extraordinary yields during the monetary tightening phase suggests that trading volumes may moderate as yields normalize and bond market growth slows. Maintaining profitability and market momentum will require successful implementation of strategic initiatives attracting new listings, expanding investor participation, and developing new market segments. The NSE’s demonstrated capacity to execute strategic improvements and adapt to market dynamics provides confidence that the exchange will continue its trajectory of becoming a major regional and emerging market financial hub supporting Kenya’s economic development and financial inclusion objectives.
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By: Montel Kamau
Serrari Financial Analyst
9th March, 2026
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