The Nairobi Securities Exchange (NSE) is rolling out a series of market reforms in a bold attempt to reverse years of decline and reposition itself as a modern, diversified exchange that can attract retail, institutional, and diaspora investors alike. 

From the introduction of single stock futures and dollar-denominated assets to tokenisation and single-unit trading, the bourse is pursuing innovations that signal a shift from traditional stockbroking to a more product-driven, globally aligned capital market. 

These efforts come amid sobering fundamentals. As of June 2025, NSE’s market capitalisation stood at Ksh2.3 trillion, well below pre-pandemic levels, while average daily turnover has slumped to under Ksh600 million from peaks above Ksh2 billion five years ago.  

Investor outflows 

Foreign investor outflows exceeded Ksh50 billion between January 2023 and June 2025, with retail participation stagnant at 1.5 million accounts, far below the 2029 target of nine million. 

Among the most notable reforms is the July launch of single stock futures, starting with five companies, including Kenya Power, KenGen, Kenya Re, Liberty Kenya, and Britam.  

The derivatives allow traders to hedge or speculate using leverage. Though early volumes remain low, analysts say this signals structural evolution rather than a quick turnaround.  

This aligns with global markets and creates a framework that could attract algorithmic and institutional investors previously deterred by NSE’s limited product set, they reckon. 

The introduction of dollar-denominated trading is another leap, allowing local and diaspora investors to access US-listed stocks and bonds directly, without offshore intermediaries.

Geoffrey Odundo, the immediate former NSE Chief Executive, termed this “a way to retain local wealth that would otherwise leave our financial system.” 

With diaspora remittances hitting a record $4.3 billion (about Ksh554.7 billion) in 2024, this move opens a strategic channel to repatriate capital and hedge against the shilling’s volatility.

For investors grappling with sub-inflation interest rates, these assets offer critical inflation-adjusted returns. 

The NSE has also simplified entry for retail traders by enabling single-unit share trading, removing the 100-share minimum lot size.

“This initiative is part of our broader efforts to boost financial inclusion,” said Frank Mwiti, the new NSE chief executive.  

“It aligns with our goal to grow the number of active investors to 9 million by 2029.”

However, for price discovery purposes, closing prices will only reflect trades of 100 shares or more. The most transformative innovation may lie in asset tokenisation.  

The NSE has partnered with the Hedera Council to establish a regulated platform enabling fractional ownership of high-value real assets like toll roads, housing, and stadiums.

This is expected to go live in 2026, pending regulatory approvals.