Inside the NSE's KSh4 Trillion rally

Good evening. It’s Brian from The Kenyan Wall Street.

These are our stories today :

Inside the NSE's KSh4 Trillion rally

By Harry Njuguna

The Nairobi Securities Exchange (NSE) has crossed the KSh4 trillion mark for the first time, reaching the milestone less than nine months after breaking through KSh3 trillion as a rally led by Safaricom and banking stocks gathered pace. Investor wealth has already grown by more than KSh1 trillion this year, matching last year's record gains and marking the first time the market has delivered back-to-back trillion-shilling wealth creation. 

What's also striking is not just the size of the rally but its concentration: banks and Safaricom now account for more than three-quarters of the exchange's total value, underscoring how heavily the market still depends on a handful of blue-chip counters even as several mid-cap stocks perform well. The next question is whether stronger corporate earnings and broader participation can sustain the momentum, or whether the market will need a new engine once the heavyweight stocks begin to cool.

Read the full analysis here >>>>>

More from the NSE

The Real Cost of Inflation

By Fred Obura

A KSh40 increase in the daily matatu fare may not sound dramatic in isolation, but it captures how inflation is being felt far more sharply than the headline numbers suggest. While Kenya's annual inflation edged up to 6.5% in July, transport costs surged 15.6% over the past year as higher fuel prices filtered through to commuters, even after pump prices stabilized in recent weeks. The pressure doesn't end on the road, as fresh vegetables, cooking gas and other everyday essentials have also become noticeably more expensive, forcing households to rethink how they spend. A few staples, including maize flour and sugar, have offered some relief, but for many families the biggest challenge remains the rising cost of simply getting to work and putting food on the table.

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INSIGHT : Why CBK is Likely to Leave Interest Rate Unchanged at August Meeting

By Parminder Kaur Umesh - Analyst

The Central Bank of Kenya (CBK) is likely to leave its benchmark interest rate unchanged this month, caught between an economy that still needs support and inflation risks it cannot afford to ignore. Oil prices have retreated since tensions between the U.S. and Iran eased, helping contain imported inflation, but policymakers remain wary that any fresh geopolitical shock could quickly push fuel costs up, and eventually transport fares and consumer prices. 

At home, growth has softened, private-sector credit remains sluggish despite abundant banking-system liquidity, and lenders are still grappling with elevated bad loans, suggesting cheaper borrowing alone may not unlock lending. With the shilling holding firm on the back of roughly six months of import cover and fresh multilateral funding, the CBK has room to wait, leaving investors to focus less on the rate decision itself and more on what it signals about inflation, oil prices and the path of future borrowing costs. 

Read the analysis here >>>>>

What you should watch…

Former CBK Governor Mr. Eric Kotut recalls the gamble that kept Kenya's economy moving after donors froze all aid. Rather than wait for funding to return, the Central Bank chose to liberalize the foreign exchange market, allowing exporters to retain their hard-currency earnings and issuing tradable foreign-exchange certificates. The move drew in a substantial flow of foreign currency and, by his account, steadied the financial system despite the freeze.

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