Time flies with great content! Renew in to keep enjoying all our premium content.
Prime
Top 5 firms raise their share of NSE wealth to 67 percent
Since 2019, foreigners have largely remained bearish on smaller markets, largely due to a flight to the safety of developed markets amid global shocks such as the Covid-19 pandemic and the Russia-Ukraine war.
The share of investor wealth concentrated in the five largest companies at the Nairobi Securities Exchange (NSE) rose in the second quarter of the year as blue chip stock prices rebounded on increased foreign investor demand.
Latest market data shows that these large firms —Safaricom, Equity Group, EABL, KCB Group and Standard Chartered Bank Kenya— have a collective market capitalisation of Sh1.75 trillion, accounting for 67.6 percent of the NSE’s total valuation of Sh2.59 trillion.
The wealth concentration marks an increase from 64.1 percent at the beginning of the year, and 63.3 percent at the end of the first quarter in March. Their share of the market, however, remains well below the highs of 81 percent seen four years ago, when the NSE was in a bear run that depressed prices of smaller stocks.
These large firms have recorded valuation gains of between five and 63 percent in the year to date, helping the NSE to add Sh535.44 billion in investor wealth in the period.
“This indicates increased investor focus on leading counters such as Safaricom, Equity Group, KCB, Co-operative Bank of Kenya, and EABL, which likely outperformed or remained more resilient than the broader market,” said the Capital Markets Authority (CMA) in its second quarter market soundness report published yesterday.
“Compared to 2024, when concentration mostly remained below 65 percent with only minor spikes, the rise in quarter two of 2025 suggests a renewed tilt toward dominant stocks. This trend may reflect growing risk aversion or selective investor confidence in large, stable firms amid ongoing market volatility.”
The listing drought at the NSE since 2011 has been identified as one of the causes of the market concentration in a select group of blue chips. New listings have traditionally reinvigorated the market by bringing in new investors and broadening the number of viable companies in which to invest.
The market is however looking ahead to a new pipeline of listings by government owned enterprises, under a proposal by the National Treasury to standardise their financial reporting frameworks and sell 20 percent equity to the public via the NSE.
At the same time, foreign investor exits from the market have come down since March, compared to the first quarter of the year.
CMA data shows that the foreigners cumulatively made net sales of Sh177 million in quarter two, down from Sh3.26 billion in the first quarter. June also marked the first time in nine months that the foreign investors had made net inflows into the NSE, with buys of Sh820 million.
The foreign investors mainly trade on the large blue chips that are also included on global platforms such as the Morgan Stanley Capital International (MSCI) frontier market indices.
Of the Kenyan companies, Safaricom, Equity Group, EABL, KCB Group, Co-operative Bank of Kenya and Standard Chartered Bank Kenya are listed on the MSCI frontier markets index, while BAT Kenya, KenGen, Kenya Re, Kenya Power, DTB Group, Carbacid Investments and HF Group are on the MSCI frontier markets small cap index.
Inclusion in these indices gives the companies visibility among foreign investors, helping their liquidity and price discovery due to the exposure to deep pocketed overseas investors.
