The value of bonds traded in the secondary market at the Nairobi Securities Exchange (NSE) hit a historic high of Sh2.7 trillion in 2025, promising stockbrokers and the exchange operator higher commission income.
The bonds turnover was nearly double the Sh1.5 trillion worth of debt securities that were traded at the bourse in 2024, which also represented an all-time high and the first instance of the annual value crossing the trillion-shilling mark.
At the same time, equities turnover rose by 37.3 percent or Sh30 billion to Sh145 billion in 2025, further boosting the expected commissions by market players as local investor activity picked up in line with the market’s bullish run in the period.
The NSE attributed the rising turnover numbers to increased participation and demand from investors, with falling interest rates making older, high-paying bonds such as the infrastructure papers issued in 2023 and 2024 more attractive.
‘We saw investors pivoting to the secondary market due to the central bank’s easing cycle, hunting for favourable yields and capital gains,’ said Melodie Ndanu, a research analyst at Standard Investment Bank.
‘The muted growth in banks’ lending to the private sector meant that they were also trading in government securities as they rebalanced their balance sheets.’
There is an inverse relationship between bond prices and yields in the secondary market, where an increase in one results in a fall in the other.
When rates on new issuances in the market are going down in line with the Central Bank of Kenya (CBK) base rate cut from 13 percent to nine percent, investors are reluctant to sell existing holdings, which pay higher interest, since they would earn less returns from new purchases in the market. They therefore demand a premium on price if they are to sell their bonds.