January opened 2026 on firm footing at the Nairobi Securities Exchange, with indices extending gains from 2025 even as trading activity cooled and foreign investors turned net sellers.
- •Banking stocks anchored index performance, selective counters delivered sharp rallies, and bond market activity accelerated, underscoring a market rotating rather than stalling.
- •Equities closed January broadly higher, confirming early-year momentum after a strong 2025. The Banking Index led all benchmarks, rising 5.59%, ahead of the NSE 20 at 5.10% and NASI at 4.71%.
- •Gains were supported by strength in select banks, utilities, industrials, and media stocks, despite softer participation metrics.
Market breadth remained constructive. Thirteen stocks posted double-digit monthly gains, led by Kenya Airways at 36.83% and Uchumi Supermarket at 23.30%. Car and General, Absa NewGold ETF, Co-operative Bank, Kenya Power, Diamond Trust Bank, and NCBA also recorded solid advances, reflecting renewed appetite for both cyclical and defensive exposures.
Losers were limited. Only fifteen stocks declined during the month, with Olympia Capital, WPP ScanGroup, Home Afrika, and Liberty Kenya among the laggards. Most pullbacks remained contained, suggesting profit-taking rather than broad risk aversion.
Banking stocks were the key index driver with Absa, Co-operative Bank, Diamond Trust, and NCBA delivering double-digit gains, offsetting flat to modest moves in Equity Group, KCB, and Stanbic. The sector’s leadership aligned with corporate activity, balance-sheet resilience, and valuation support.
Liquidity trends softened. Equity turnover fell 20.7% month-on-month to KSh 13.52Bn from KSh 17.04Bn in December, while foreign investors shifted to net selling of KSh 1.09Bn, reversing a marginal inflow the prior month. The selling bias contrasted with rising prices, pointing to domestic investors carrying the market higher.
Valuations remain supportive according to data from Cytonn. The market traded at a P/E of 7.8x, a 31% discount to the historical average, with a dividend yield of 5.1%. The NASI PEG ratio at 1.0x signals pricing broadly aligned with expected growth, leaving limited evidence of excess despite January’s gains.
Fixed income activity strengthened. Secondary bond turnover rose 20.7% to KSh 278.2Bn, up 76.9% year-on-year, reflecting sustained positioning by commercial banks amid stable rates and declining Treasury bill yields.
NSE January 2026 Key Numbers
• Equity turnover: KSh 13.52Bn
• Foreign flow: Net sell KSh 1.09Bn
• Bond turnover: KSh 278.2Bn
• Best-performing index: Banking Index +5.59%
• Market valuation: P/E 7.8x, dividend yield 5.1%
Corporate developments shaped sentiment.
- •NCBA became the focal point following Nedbank’s intention to acquire a controlling stake.
- •Kenya Pipeline Company launched a landmark IPO, reinforcing capital markets depth.
- •Regulatory approvals for KCB’s fintech acquisition and Zenith Bank’s entry via Paramount Bank highlighted ongoing consolidation.
- • Profit warnings from Umeme and Liberty Insurance weighed on sentiment in select counters but did not derail broader momentum.
