Weekly Markets Review: Treasury Bills Rally, Equities Edge Up, Real Estate Sees Major Investment

Kenya’s financial markets recorded notable activity across fixed income, equities, and real estate during the week, with Treasury bills continuing to attract strong investor appetite, equities posting gains, and the real estate sector welcoming a significant foreign-backed development.

Fixed Income Market: T-Bills Oversubscribed for Fourth Week

Treasury bills were oversubscribed for the fourth consecutive week, with the overall subscription rate rising to 161.5%, up from 141.2% the previous week. Investor preference remained skewed toward the shorter-term 91-day paper, which received bids worth Ksh.15.4 billion against the Ksh.4.0 billion offered, translating to an impressive 385.2% subscription rate, more than double the 146.7% recorded a week earlier.

The 182-day paper, however, saw reduced demand, with subscriptions falling to 31.3% from 49.1%. Similarly, the 364-day paper recorded a lower subscription of 202.3%, compared to 231.0% previously.

Out of total bids worth Ksh.38.7 billion, the government accepted Ksh.28.9 billion, reflecting an acceptance rate of 74.6%. Yields on all tenors eased slightly, with the 364-day paper falling the most, by 3.1 bps to 9.55%, while the 91-day and 182-day papers dropped by 1.5 bps and 1.4 bps to settle at 7.97% and 8.02%, respectively.

Government Borrowing Plan

The National Treasury released Kenya’s Annual Borrowing Plan for FY 2025/26, outlining strategies to finance a projected Ksh.1.5 trillion gross borrowing requirement. This target is driven by a Ksh.901.0 billion fiscal deficit and significant debt refinancing obligations.

Also Read: How Kenya’s Treasury Bills, Bonds Market Performed in January 2025

Anchored on a stable outlook of 5.3% GDP growth and improved revenue collection, the plan signals a stronger focus on domestic borrowing to cushion against external shocks. It also emphasizes liability management tools such as bond switches, buybacks, and the introduction of innovative debt instruments aimed at smoothing maturities and cutting borrowing costs. The approach aligns with the government’s broader goal of fiscal consolidation and debt sustainability.

Equities Market: Positive Momentum

The equities market remained on an upward trajectory, with the NSE 20 Index gaining the most at 1.7%, followed by the NSE 25 (1.6%), NSE 10 (1.0%), and NASI (0.2%). Year-to-date, the indices have delivered strong returns: 46.6% (NSE 20), 42.6% (NASI), and 33.8% each for NSE 10 and NSE 25.

Gains were buoyed by large-cap stocks such as ABSA (+11.1%), NCBA (+9.8%), and KCB (+3.9%). However, the rally was partially offset by declines in StanChart (-6.3%), Equity Group (-2.3%), and Co-operative Bank (-2.0%).

In the regional equities market, the East African Exchanges 20 (EAE 20) share index fell by 87.0 bps to 99.05, down from 99.95. Losses from CRDB Bank (-5.7%), Equity Group (-2.2%), and KCB Group (-1.9%) weighed on performance, though gains from Co-operative Bank (+22.1%), ABSA Bank Kenya (+11.9%), and Stanbic Uganda (+7.5%) provided some support.

Real Estate: Global Player Joins Tatu City SEZ

Kenya’s real estate sector welcomed a major investment as Hounen, a global developer and solar energy manufacturer, announced plans for a 43,500 square meter mixed-use project within the Tatu City Special Economic Zone (SEZ).

The development will integrate solar manufacturing with office, retail, commercial, and residential components. As part of the project, four high-rise towers ranging between 21 and 26 storeys will be constructed, marking a major boost for Tatu City’s positioning as a hub for sustainable urban development.

Meanwhile, activity in the Unquoted Securities Platform (USP) remained steady. As of September 5, 2025, Acorn D-REIT and I-REIT traded at Ksh.27.4 and Ksh.23.2 per unit, reflecting gains of 37.0% and 16.0%, respectively, from their Ksh.20.0 inception price. Conversely, ILAM Fahari I-REIT traded at Kshs 11.0, representing a sharp 45.0% decline from its inception level.

Outlook

The week’s developments highlight robust investor appetite for short-term government securities, continued optimism in the equities market, and rising foreign-backed investments in real estate. With the government’s borrowing plan prioritizing domestic financing and liability management, coupled with increased activity in capital and property markets, Kenya’s financial ecosystem is set for dynamic shifts in the months ahead.