The Nairobi Securities Exchange (NSE) closed the week ending February 26, 2026, on a positive note, with major indices posting solid gains amid strong bond market activity and a stable macroeconomic backdrop.

The NSE All-Share Index (NASI) rose 2.10 percent, while the NSE 25 Share Index climbed 2.43 percent and the NSE 20 Share Index advanced 1.49 percent. Market capitalisation increased by 2.10 percent, reflecting improved valuations across listed securities.

Trading activity showed mixed signals. Total shares traded jumped 28.97 percent to 263.06 million, indicating heightened investor participation, though equity turnover dipped 5.58 percent to Ksh5,983.25 million, suggesting selective trading in higher-value counters.

Total equity deals fell 29.55 percent, pointing to a more concentrated flow of transactions. Analysts noted that investors appeared focused on large-cap stocks amid steady market sentiment.

Bond market drives investor confidence

The bond market emerged as a standout performer, with domestic secondary market turnover surging 36.94 percent to Ksh140,951.38 million during the week.

The sharp increase highlights robust liquidity and strong demand for fixed-income instruments, particularly among institutional investors seeking stable returns in a low-inflation environment.

Treasury bill auctions also recorded strong participation, with yields on shorter tenors like the 91-day paper declining to 7.580 percent, creating an attractive climate for bond investors.

Kenya’s stable macroeconomic indicators support these developments. Headline inflation eased to 4.3 percent in February 2026, with core inflation at 2.1 percent.

The Kenyan shilling held steady at Ksh129.02 per US dollar, while foreign reserves remained strong at Ksh1.617 trillion, equivalent to 5.4 months of import cover.

Market sentiment boosted by strong economic

The positive equity performance, combined with vibrant bond trading, reflects growing investor confidence in Kenya’s economic stability.

International developments also played a role, with Eurobond yields rising slightly by 1.68 basis points, mirroring movements in peer markets such as Angola and Côte d’Ivoire.

Factors, including a softer U.S. dollar and falling oil prices, with Murban crude at Ksh8,997 per barrel, further supported investor optimism.

Overall, the week’s activity underscores the NSE’s role as a barometer of economic sentiment. With easing inflationary pressures, a firm shilling, and ample liquidity, analysts suggest the market is well-positioned for sustained momentum if macroeconomic conditions remain favorable.

Investors continue to balance equity gains with fixed-income securities, signalling a measured but optimistic outlook for the Kenyan capital markets.