The combined value of companies listed on the Nairobi Securities Exchange (NSE) has crossed the Sh4 trillion mark at the end of a quarter for the first time, according to new data from the Capital Markets Authority (CMA), even as the volume of shares changing hands fell steeply.

The regulator's statistical bulletin for the third quarter of 2026, covering July to September, shows market capitalisation rising 9.57 per cent to Sh4.12 trillion at the end of September, up from Sh3.76 trillion in June. That is 48 per cent higher than the Sh2.78 trillion recorded a year earlier, and about Sh1.18 trillion more than the Sh2.94 trillion the market was worth at the end of December 2025.

CMA chief executive Wyckliffe Shamiah said in the report that the milestone "demonstrates the confidence, resilience and competitiveness of Kenya's capital markets," The Star reported.

Indices at multi-year highs

The gains were broad. The NSE 20 Share Index climbed 14.95 per cent during the quarter to 4,316.96 points, from 3,755.44 in June, and is up about 45 per cent on the year. The Nairobi All Share Index (NASI) rose 9.57 per cent to 245.60 points, nearly 39 per cent above its level in September 2025.

The rally remains heavily concentrated. Safaricom, by far the biggest listed firm, had an average market value of about Sh1.49 trillion during the quarter, The Kenya Times reported, while the ten largest companies, including Equity Group, KCB Group, East African Breweries, Co-operative Bank and Absa Bank Kenya, account for more than 80 per cent of the bourse's total value.

Trading dries up

Behind the record valuation, activity on the trading floor thinned dramatically. Equity turnover fell 72.44 per cent from the second quarter to Sh72.72 billion, down from Sh263.87 billion, while the number of shares traded dropped about 76 per cent to 1.87 billion from 7.7 billion.

The second quarter had been unusually busy, so the comparison is stark. Measured against the same quarter of 2025, turnover was still 57 per cent higher than the Sh46.23 billion recorded a year earlier.

Foreign investors were more active as a share of the market, averaging 32.97 per cent of participation compared with 25.58 per cent in the previous quarter. But they were net sellers, buying about Sh21.7 billion worth of shares and selling Sh27.4 billion, according to The Kenya Times.

Bonds take the spotlight

The fixed-income market moved in the opposite direction. Bond turnover rose 34.6 per cent to Sh837.13 billion, from Sh621.83 billion in the second quarter, driven mainly by government paper. The Treasury raised Sh585.32 billion from the primary bond market during the period through 12 reopenings and three switch bonds.

Collective investment schemes, which include money market funds, also continued to grow. Assets under management reached Sh948.7 billion by June, up 11 per cent from Sh851.7 billion in March, edging closer to the Sh1 trillion mark. The CMA attributed the growth to expansion of existing funds, more funds reporting under umbrella schemes, and more aggressive marketing by fund managers.

The regulator also approved new products during the period, among them the WSA Banking ETF, described as Kenya's first locally domiciled and locally sponsored exchange-traded fund.

No new money raised

Despite the buoyant prices, the bulletin recorded no initial public offerings, additional share offers, rights issues or listings by introduction in the quarter, meaning companies raised no fresh equity capital through the exchange.

That picture is set to change in the current quarter. Supermarket chain Quickmart's Sh15 billion IPO closes on Friday, with trading scheduled for November 12, meaning the fourth-quarter bulletin will capture at least one major new listing, although that offer is a sale of existing shares rather than a capital raise by the company.

Market watchers say the key question is whether higher valuations will translate into deeper, more sustained trading and easier access to capital for businesses, rather than gains concentrated in a handful of blue-chip counters.

Photos: The Star, The Kenya Times