Foreign investors on the Nairobi Securities Exchange (NSE) made net sales of Sh1 billion in the week ended September 5, 2025, as they took advantage of higher share prices to book profits on blue-chip stocks.
The selling activity came on the back of sustained net purchases in previous weeks, which resulted in a net inflow position of Sh1.6 billion in August, the highest monthly inflow in four years.
Banking stocks and Safaricom were at the centre of foreign investor activity this week, in keeping with their ample liquidity, which supports large ticket trades.
The two sectors accounted for 85 percent of the NSE’s total traded turnover of Sh7.21 billion last week.
Traders attributed the selling activity to profit-taking on these stocks, ahead of the close of the third quarter reporting period later this month.
Safaricom also dominated on the foreign trading desk, recording net sales of Sh936 million in the period as its share price touched a three-year high of Sh30 in the week, setting the stage for profit-taking.
Among the banks, foreign investor activity was seen on Equity Group, KCB Group, and DTB, although at much lower volumes compared to Safaricom.
“With no major corporate announcement to which we can attribute the selling activity, the net exits point to profit-taking. It could be that the stock hit a certain price point at which the portfolio managers had planned to sell,” said Melodie Ndanu, an analyst at Standard Investment Bank.
Analysts attributed the upturn in flows in August to investors generally turning to the equity markets in anticipation of further US rate cuts later this year, which will likely send yields in fixed income markets lower.
A larger number of Kenyan stocks have also been exposed to foreign investors through their inclusion on the globally watched Morgan Stanley Capital International (MSCI) frontier market indices.
The MSCI World Index captures 1,395 large and mid-size companies listed across 23 developed economies, including the US, the UK, Switzerland, Singapore, Germany, Israel, Japan, France and Australia.
The top constituent companies of the index, ranked by market capitalisation are Apple, Nvidia, Microsoft, Amazon, Meta (Facebook’s parent company), Alphabet (Google’s parent company), Broadcom, Tesla and JPMorgan.
Of the Kenyan companies, Safaricom, Equity, EABL, KCB, Co-operative Bank, and Standard Chartered Bank Kenya are listed on the MSCI frontier markets index, while BAT Kenya, KenGen, Kenya Re, Kenya Power, DTB Group, Carbacid, Bamburi Cement and HF Group are on the MSCI frontier markets small-cap index.
Being added to these indices gives the companies visibility among foreign investors, helping their liquidity and price discovery due to the exposure to deep-pocketed overseas investors.
Prior to the recent buying activity, foreigners had largely been net sellers in the market.
Since 2019, they have remained largely bearish on smaller markets due to a flight to safer developed markets in response to global shocks such as the Covid-19 pandemic and the Russia-Ukraine war.
Last year, they sold a net of Sh16.5 billion, although this figure was inflated by the block trade sale of Bamburi shares by Swiss multinational Holcim to a Kenyan-registered subsidiary of Tanzanian conglomerate Amsons Group.
The last full year of inflows at the NSE was 2019, when the foreigners bought a net of Sh1.38 billion worth of shares.
