The value of bonds traded in the secondary market rose by 49.1 percent in the first three months of this year, compared to a similar period last year to cross the Sh1 trillion mark, as investors hunted for older government paper with higher returns.
Data from the Nairobi Securities Exchange (NSE) shows the value of bonds traded in the quarter ended March 2026 was Sh1.08 trillion compared to Sh724.8 billion over the same period last year.
Falling interest rates on newly issued Treasury bonds and Treasury bills has seen investors seek older higher yielding government securities in the secondary market at the NSE.
Treasury bonds are currently offering returns of between 11 percent to 13 percent from up to 18 percent in 2024.
‘We have been seeing retailers and offshore investors really pushing the secondary market (trading at the NSE),’ said the chief executive of Capital A Investment Bank, Linus Kang’ara.
‘DhowCSD has made transacting of bonds easy, creating traffic,’ he added.
DhowCSD, introduced in July 2023, allows investors to directly purchase Treasury bills and bonds from their smartphones, with the new system shortening the previously lengthy sign-up process.
Data from the Central Bank of Kenya (CBK) shows households held Treasury bills and bonds worth Sh428.8 billion in December 2025, up from Sh365.9 billion a year earlier, signalling increased retailer participation.
DhowCSD also allowed the CBK to improve the classification of holders of government securities, as the platform is able to categorise the ultimate holder of Treasury bills and bonds including those traded in the secondary market.
The volume of government securities held by non-residents grew month-on-month from June last year to Sh311.3 billion as at end of December 2025, with stockbrokers indicating increased activity from the diaspora market in the first quarter of 2026.
The increased bond trading was also attributed to high liquidity in the market, profit taking by investors holding high-yielding securities and repositioning by corporate clients and fund managers in March.
‘There was a lot of switching especially to the short end of the curve where the returns have been relatively higher,’ said Eric Musau, director of research at Standard Investment Bank.
Stockbrokers are looking at a bumper year, with the increase in trading signalling higher commission fees for them. The bonds turnover for the period was Sh2.16 trillion – double the value traded – given that each trade has a buy and sell.
Capital A Investment Bank retained its position as the largest stockbroker in the bonds market with a market share of 18.4 percent, followed by Standard Investment Bank which had 12.8 percent share of the first quarter turnover. The top five brokers in the bond market control over 50 percent of the market, riding on corporate and fund manager business.
The others in the top five intermediaries are SBG Securities with a 7.63 percent, Faida Investment Bank (7.22 percent) and NCBA Investment Bank with a 5.83 percent market share. The turnover of the five brokers was Sh1.12 trillion while the other 22 intermediaries handled Sh1.04 trillion.
The stockbrokers’ market share signals the financial performance of the intermediaries, with trading commissions being a major revenue line.
Stockbrokers normally charge a commission of 0.03 percent per bond trade. Other top players in the bond market, as at the first quarter data, were Kestrel Capital with a 5.56 percent market share, Sterling Investment Bank (5.16 percent) and Genghis Capital (5.08 percent).