CMA chief executive Wyckliffe Shamiah /HANDOUT

Kenya’s Securities Market crossed the Sh4 trillion valuation mark for the first time in the third quarter of 2026 despite a sharp decline in share trading activity.

The Nairobi Securities Exchange’s (NSE) market capitalisation rose 9.57 per cent to Sh4.12 trillion in September, up from Sh3.76 trillion in June, according to the Capital Markets Authority’s (CMA) quarterly statistical bulletin.

However, equity turnover plunged 72.44 per cent to Sh72.72 billion during the three months to September, compared with Sh263.87 billion in the second quarter. The volume of shares traded also fell 75.74 per cent to 1.87 billion shares from 7.7 billion.

The analysis points to a market where share valuations have continued to rise despite significantly lower trading activity, presenting a challenge for policymakers seeking to deepen Kenya’s capital markets and attract more investors.

“The market capitalisation crossing the Sh4 trillion mark for the first time demonstrates the confidence, resilience and competitiveness of Kenya’s capital markets,” said CMA chief executive Wyckliffe Shamiah in the report.

The NSE’s benchmark indices recorded strong gains during the period, supporting the increase in market value.

The NSE 20-Share Index rose 14.95 per cent to 4,316.96 points from 3,755.44 points in the previous quarter, while the Nairobi All Share Index (NASI) gained 9.57 per cent to close at 245.60 points.

On a year-on-year basis, the performance was even stronger. The NSE 20-Share Index increased 45.22 per cent from 2,972.64 points in September 2025, while the NASI rose 38.96 per cent from 176.74 points.

Market capitalisation was 48.02 per cent higher than the Sh2.78 trillion recorded in September last year.

Despite the quarterly slowdown, equity turnover remained above the Sh46.23 billion recorded in the corresponding period of 2025, representing a 57.32 per cent annual increase.

The decline in trading activity also contrasted with developments in the bond market, where turnover increased 34.62 per cent to Sh837.13 billion from Sh621.83 billion in the second quarter.

The government raised Sh585.32 billion through Treasury bond issuances in the primary market during the quarter, using 12 bond reopenings and three switch bonds.

In the review period government securities recorded substantial trading volumes while equity transactions slowed on a quarterly basis.

The CMA also reported growth in collective investment schemes, whose assets under management reached Sh948.7 billion by June 2026, an 11 per cent increase from Sh851.7 billion in March.

The authority attributed the growth to the expansion of existing funds, additional funds reporting under umbrella schemes and increased marketing by fund managers.

However, the latest equity market performance raises questions about whether rising valuations will translate into sustained trading activity and greater access to capital for businesses.

“The quarterly report recorded no initial public offerings, additional share offers, rights issues or listings by introduction during the period,” the report says in part

The absence of fresh equity fundraising suggests that, despite the market’s growing valuation, companies did not turn to the NSE to raise additional capital through these channels in the third quarter.