The Central Bank of Kenya (CBK) has launched a high-stakes tender for its own retail bond system, a move that comes just as the Nairobi Securities Exchange (NSE) breaks new ground in secondary bond market activity.
- •On July 21—only three days before CBK unveiled its plan—the NSE’s secondary bond market reached a record KSh 1.552 trillion in turnover, surpassing last year’s full-year total with five months still left in 2025.
- •If the current pace continues, market turnover could exceed KSh 2.5 trillion by year-end, reinforcing the NSE’s dominance as the core venue for government securities trading.
- •The tender, published July 24, seeks a full-service information system for retail investors—one capable of handling bond issuance, sales, settlement, and investor servicing.
While the official aim is to expand retail access and digitize the process, the system’s end-to-end scope has fueled fears that CBK could build infrastructure parallel to, or even bypassing, the NSE’s established secondary market role.
Such a move would put the exchange’s KSh 2 trillion secondary bond turnover business at risk, along with significant revenues for brokers, custodians, and other market intermediaries.
Kenya’s bond market has never been more dynamic. Retail holdings of government securities have soared to KSh 801.8 billion—double the level of just two years ago—thanks to new digital access tools such as CBK’s Dhow CSD. Trading volumes and liquidity have climbed to unprecedented highs.
As yields fall on new government bonds, older, high-coupon securities are in high demand—driving even more activity into the secondary market and heightening concern about the potential impact of a new CBK-run system on the existing structure.
The CBK tender does not explicitly state plans to seize or replace the NSE’s secondary bond market function. Still, the breadth of requirements—and the timing—have left industry players questioning the regulator’s long-term intentions and the risk of market fragmentation.
The tender closes August 13, with a pre-bid meeting scheduled for July 31.
