Local institutional investors piled into listed stocks at the Nairobi Securities Exchange (NSE) to increase their equities holdings as individuals cashed out to realise gains from last year’s market rally.
Foreign investors were also net sellers of local stocks, increasing the pool of shares available to local companies for purchase.
Data from the Nairobi bourse shows local firms closed 2025 with Sh14.5 billion in net equity purchases while local individual investors were net sellers, disposing of Sh2.59 billion shares over the same period.
The net sales by retail investors came in the backdrop of the market posting a record 51.8 percent gains across the year with investor wealth rising by more than Sh 1 trillion from Sh1.93 trillion at the end 2024 to Sh2.94 trillion on December 31, 2025.
Local corporations purchased Sh67.5 billion shares in 2025 and only sold Sh53 billion stocks in the same period.
Total purchases by local retail investors stood at Sh30.2 billion but were surpassed by sales at Sh32.7 billion.
The sell-off by individual investors is expected to increase equity ownership by local institutions which are viewed to have a longer investment horizon in the market in comparison to retail investors.
Investment bank Rock Advisors research analyst Teddy Irungu said retail investors sold stocks in 2025 as they looked to cash in from back-to-back years of capital gains, especially from blue-chip firms such as Safaricom and KCB Group.
‘Individual investors were mostly profit-taking as the market posted gains of 51 percent on a year-over-year basis. They thought it was a good time to cash out having marked strong gains across 2024 and 2025,’ he said.
‘Corporates have been buyers as they move to rebalance their portfolios and position themselves for dividends with the performance of listed firms in 2025, especially those in financial services, being projected to be excellent, yielding improved shareholder payouts.’
Corporates are widely assessed to have a pragmatic approach in equities, investing as they must maintain stocks within their investment portfolios.
Retail investors meanwhile tend to hold a short-term investment horizon on equites.
Equity turnover at the NSE recovered to hit a five- year high of Sh145.47 billion from Sh105.97 billion in 2024 as the share prices rally drove activity at the Nairobi bourse while the volume of shares traded stood at 6.3 billion.
The gains in share prices were widespread with small firms leading the way during the year.
Uchumi Supermarkets led the market with a gain of 505.8 percent to trade at Sh1.03 per share from 17 cents with the rally being driven mainly by speculation that the company was returning to a better footing after posting a rare profit.
Other top gainers for 2025 were Sameer Africa Plc (486.4 percent), Home Africa (262.1 percent) and the NSE (237.5 percent).
Gains for the largest listed firm by market capitalisation -Safaricom- stood at 66.2 percent with its share price rising from Sh17.05 at the end of December 2024 to Sh28.35 in the review period.
Deal-making and new listings are tipped to drive fresh retail investor interest in the NSE as individuals seek specific entry points to return to market.
The proposed acquisition of a controlling stake in NCBA Group by South Africa’s Nedbank has for instance driven the demand for the lender’s shares in early 2026 while the Kenya Pipeline Company (KPC) initial public offer is currently open until February 19.
‘Individual investors are strategically positioning for the next best opportunity. We are seeing mergers and acquisitions and other deals and have the KPC initial offering,’ added Mr Irungu.
Like individual investors, foreign investors were also net sellers in 2025, posting Sh11.8 billion in net portfolio outflows as per Capital Markets Authority data.
The foreigners recorded Sh2.48 billion in total inflows against Sh14.3 billion in total outflows.
The exits by foreigners in 2025 were attributed to the offshore investors seeking positions in advanced economies to take advantage of the AI stocks powered market rally which presented relatively higher returns to investing locally.