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Foreign investors’ participation at the Nairobi bourse has dipped to its lowest level in over a decade as they seek higher returns in developed markets like the US and UK.

Data from the Capital Markets Authority (CMA) for the three months to September show that the share of foreign investor participation in the NSE equities market fell to 28.01 percent in September from 31.28 percent in August and 59.51 percent in April.

This emerges in a period when foreigners have remained net sellers at the NSE for all months this year save for June and August, making local investors key drivers of the bourse, which has gained 46.6 percent since the start of the year.

Foreign investors’ net sales, when share sales surpass purchases, rose to Sh7.2 billion in the nine months to September.

Steady returns from developed markets, including the US, the United Kingdom, China and Japan, have kept the offshore investors out of the NSE.

Stocks in the advanced markets have surged on the back of improved earnings and sustained appetites for tech stocks, which have been super-charged by their exploits in artificial intelligence (AI).

The share rally in the Western capitals has seen foreign investors ignore risky emerging markets such as Kenya, which has recorded a 46.6 percent gain, which the Nairobi All Share Index (NASI) has chalked up since the start of the year.

Analysts have reckoned that the continued positive returns from global markets, notably the US, have reduced the appeal of the NSE.

‘Positive returns year-over-year in developed markets make it more difficult to justify investing in Africa from a risk/reward perspective,’ analysts at Sterling Capital stock brokerage noted previously.

This month, the US market marked the third anniversary of its most recent bull run, which has been powered by gains in mega cap technology stocks such as Meta, Microsoft, Nvidia, Alphabet, Amazon, Apple and Tesla.

The US market rally has minted multi-trillion-dollar companies with Apple and Microsoft crossing $4 trillion in valuation each on Tuesday.

Drivers include improved sales of the new iPhone for Apple and the finalisation of a stake purchase in ChatGPT maker OpenAI’s for-profit business.

The market rally has defied concerns over President Donald Trump’s trade tariffs and fears of an investment bubble around tech stocks.

The NSE faced a difficult task of shaking off recent jitters, including weak policies and currency depreciation, which have exacerbated capital outflows from emerging and frontier economies.

Kenya has yet to have calendar net inflows from foreign portfolio investments into the NSE since 2019.

‘Capital flight to hard currency-denominated assets over the past few years has largely been driven by negative sentiment toward sub-Saharan Africa as a whole due to currency depreciation, the Covid-19 pandemic and inconsistent policies negatively impacting business,’ the analysts at Sterling Capital added.

Foreign investors made a high of Sh4.9 billion in net sales from the NSE in September, offsetting inflows of Sh1.6 billion in August, according to market data compiled from stock brokerages.

The foreigners have remained net sellers so far in October, selling stocks worth Sh1.4 billion on a net basis through Monday this week.

Outflows by foreign investors are expected to continue to the end of the year if gains in advanced markets hold up in the fourth quarter.

Global volatility from US tariff policies is, however, seen driving foreigners to return to emerging and frontier economies if the investment landscape in advanced economies becomes riskier and uncertain.

NSE market gains of 46 percent are on course to be last year’s return of 34 percent in what will cement its place as the top-earning asset class.

A stable exchange rate and low inflation have anchored the market rally alongside a drop in government security yields.

This has given investors

Eight directors of listed firm Kakuzi have gone back to court to stop an investigation by Capital Markets Authority (CMA) over alleged conflict of interest and financial impropriety.

In an application to be heard next month, the directors led by chief executive officer Christopher Flowers want the inquiry stopped, pending the hearing of an appeal they have filed.

Other directors facing the investigation are Nicholas Ng’ang’a, Graham Mclean, Andrew Njoroge, Ketan Rameshchandra, Daniel Ndonye, Stephen Waruhiu, and John Kimani.

The regulator started investigations into companies that have been doing business with Kakuzi and which have links to some of the directors.

The High Court on September 30 dismissed an appeal by the directors paving the way for the CMA to proceed with the inquiry.

But the directors submitted that they will suffer substantial prejudice if the capital markets regulator is allowed to proceed with the inquiry process, before their appeal is determined.

The court had suspended the execution of the decision for 21 days which ended on October 21. The directors formally went back to court on October 15 and the matter was fixed for highlighting submissions on November 19, 2025.

‘The appellants are reasonably apprehensive that unless the orders sought herein are granted, the respondent (CMA) will proceed with the inquiry which will further occasion great injustice to the appellants and would render the intended appeal nugatory,’ the directors said in the application.

The High Court dismissed their appeal last month saying the directors and the company failed to prove any violation of their rights and fundamental freedoms, for the court to intervene.

‘The appellants’ (Kakuzi’s) actions also seem to be premature. As such, the contention is for rejection,’ said the court.

The eight directors had faulted the investigation, which commenced in June 2021, arguing that the entire process was not fair and did not meet the constitutional requirements of right to fair hearing.

In the second appeal, the directors have faulted the court over the failure to find and uphold their constitutional right to a fair hearing and in particular, the refusal or failure to disclose the particulars of the alleged financial impropriety.

They said the failure to disclose the complaints received from third parties and failure to give reasons as to why it considered their documents submitted during the inquiry as insufficient, was wrong.

They have also submitted that the court made an error in finding that they did not prove any infractions of their rights and fundamental rights.

It is their argument that the regulator erred by withholding the particulars of the alleged financial impropriety or give reasons for the failure to provide the nature of the complaints, received from alleged third parties.

They further submitted that they were within their constitutional rights to not only request information concerning the allegations raised against them, but also the evidence and materials relied upon by the CMA.

The regulator said in its filings that it had sufficient cause to conduct the investigation, which centred on Management and Operational Services Agreements signed between Robertson Bois Dickson Anderson Limited and Kakuzi on December 11, 2017, as well as the those signed between Eastern Produce Regional Services Limited and the agricultural firm.

The regulator also intended to probe business dealings and agreements with related companies including Robertson Bois Dickson Anderson Limited, Eastern Produce Kenya Limited, EPK Empowerment Company (Kenya) Limited, Lintak Enterprises (K) Limited, Linton Park (Kenya) Limited and Siret Tea Limited.

The Co-operative Bank of Kenya has introduced an unsecured digital overdraft facility that allows customers to overdraw their accounts by up to Sh100,000 for transactions such as bill payments, raising competition for Equity Bank Kenya and Safaricom.

The lender has informed customers that the new short-term credit facility, called ‘Kamilisha’, will enable individuals and businesses to complete transactions when they do not have sufficient funds at a time of paying bills such as house rent, electricity, stock purchases or sending money.

‘The overdraft service allows you to complete transactions when you don’t have enough money in your bank account. It bridges the shortfall between what you have and what you need to pay, helping you complete important transactions instantly,’ the lender told customers.

Kenya recorded an unusual spike in the value of gold exports in the three months ending June amid reports that the country is emerging as a transit hub for smuggled gold from other African countries.

The country exported 1,217.79 kilogrammes of gold to Dubai in that period, data collated by the Kenya National Bureau of Statistics show, earning Sh8.19 billion.

The second-quarter earnings were more than four times the country’s average annual gold earnings of Sh1.81 billion recorded in the decade to 2023, and nearly double the full-year export value for 2023, which stood at Sh4.70 billion.

Shipments to Dubai in the three months were double the average exports for the full year in 2022.

Authorities have linked the increased shipments to the sharp rally in global gold prices, as well as increased activity among artisanal miners who sell their harvest to brokers and local investors selling the precious metal to unlock value.

Harry Kimtai, the Principal Secretary for the State Department for Mining, attributed the unprecedented levels of gold earnings largely to ongoing formalisation of artisanal and small-scale mining (ASM) operations and the global rally in gold prices.

The government-led facilitation of artisanal miners has contributed to higher volumes of officially recorded exports, he said, while a jump in global gold prices by ‘more than 50 percent since January 2025’ has prompted investors to sell their holdings.

‘The jump in gold exports may be attributed to ongoing reforms in the mining sector in Kenya, coupled with the global price rally that has seen gold attain the highest price in history. The price rally has led most investors to liquidate their gold holdings to take advantage of the record prices,’ Mr Kimtai told the Business Daily.

‘We have continued to facilitate gold and other minerals extraction through formalising the artisanal mining sub-sector. The ongoing registration of ASM cooperatives has led to a significant increase in formal operations that have contributed to the rise in export volumes.’

A recent report by the Swiss development charity, SwissAid showed that Kenya was increasingly serving as a transit hub for smuggled gold from other African countries, including South Sudan and the Democratic Republic of Congo.

Illicit outflows from the country likely exceed the amount of declared gold exports by multiple times, according to the Bern-based organisation.

Most of the gold smuggled out of Kenya, the report said, is shipped to Dubai and declared for import there, with India and South Africa among the other destinations.

Kenya may also have become a conduit for gold from Sudan, where a civil war has raged since 2023.

A similar report by the group last year argued that revenue from such trade was fuelling conflict, financing criminal and terrorist networks, undermining democracy and facilitating money laundering.

The price of gold reached a record high of more than $4,000 an ounce as investors seek safe havens for their money amid concerns about global economic and political uncertainty.

Gold has seen its biggest rally since the 1970s, rising by around a third since April when US President Donald Trump announced tariffs, which have upset global trade.

The spike in Kenya’s earnings from gold exports coincided with a sharp rally in global gold prices this year. The international average price per ounce rose 12.1 percent between March and June to $3,369, up from $3,005 three months earlier, according to global commodity trackers.

The surge lifted the precious metal to the top of its export basket to the UAE, leapfrogging jet fuel re-exports, goat meat, tea, and cut flowers.

The growing Kenya’s gold export numbers will, however, reignite scrutiny over the country’s traditionally opaque trade in the precious metal.

The report by SwissAid cited discrepancies between Kenya’s official export data and gold import records from global trading partners.

It indicated that Kenya officially exported 672 kilogrammes of gold in 2023, for example, yet import records from the UAE showed 9.65 tonnes of gold declared as having originated from the country in the same year.

The mismatch between 2014 and 2023 added up to over 33.5 tonnes worth about $1.68 billion (Sh218 billion), according to the report.

‘Almost all gold mined or imported into Kenya leaves the country, but only a fraction is recorded by official statistics,’ the report said.

Citing unrecorded gold flows, SwissAid described Kenya as a critical transit hub for illicit metal from conflict zone

Responding to questions about the surge in gold export figures this year, Mr Kimtai said: ‘Kenya is a transit country for gold from neighbouring countries and there may be instances where the gold originating from our neighbours is declared as originating from Kenya and thus contributing to the numbers.’

At the heart of the mismatch is the ASM sector, which accounts for more than 90 percent of Kenya’s gold output.

Concentrated in the counties of Migori, Kakamega, Siaya, Narok and Vihiga, the ASM industry employs an estimated 500,000 miners and supports the livelihood of about two million people indirectly.

A 2019 baseline survey estimated annual ASM production at 6.9 tonnes, dwarfing the roughly 410 kilogrammes produced by Kenya’s two licensed industrial mines – Karebe Gold Mining Ltd and Kilimapesa Gold PTY Ltd.

‘Most of the ASM (artisanal small-scale mining) gold is never recorded in government books because it is either traded by unlicensed dealers internally or smuggled to neighbouring countries through the porous borders. As such no data on gold from ASMs as of now,’ one expert told SwissAid.

The organisation noted that legislation was introduced in 2023 to formalise small-scale mining and reduce the illegal gold trade, but it has not yet become law.

Weak enforcement, lack of licensing and porous borders have allowed unregistered traders to dominate the gold supply chain in Kenya.

From mining sites in Western Kenya, gold is often transported to Eastleigh in Nairobi, where middlemen and refineries operate in the shadows, according to the report. From there, unrecorded gold is smuggled out through Jomo Kenyatta International Airport (JKIA), sometimes disguised as legitimate cargo.

The Global Initiative Against Transnational Organized Crime (GI-TOC) estimated in a 2023 report that between 100 and 200 kilogrammes of Congolese gold enters Kenya every month, translating to about 2.4 tonnes a year, valued at $140 million (Sh18.20 billion). The traders use Nairobi and Mombasa as re-export points to Dubai.

This explains why UAE import statistics consistently show higher volumes than Kenya’s declared exports. In 2021, for example, the UAE recorded $185 million more in gold imports from Kenya than what Kenya reported as exports.

The proliferation of private gold refineries has further blurred the lines between legitimate and illicit trade.

Companies such as Afrik Gold Testers, Gulf Refinery, and Emirates Refinery Ltd have sprung up in Nairobi and western Kenya and are reportedly backed by Dubai-based investors.

Residential property developer Mi Vida Homes plans to raise between Sh15 billion and Sh20 billion from both local and international institutional investors in the first quarter of 2026 in what is earmarked to be Kenya’s first hybrid real estate fund.

A hybrid real estate fund is an investment vehicle that is designed to mobilise capital from investors by combining both an Income and Development Real Estate Investment Trust (Reit).

A Reit is a regulated vehicle that addresses the liquidity risk of real estate by allowing individual investors to pool funds and invest in property that would be otherwise out of reach for them in their individual capacity.

Development Reits focus on financing the acquisition of land, construction and development of properties with the end goal being generation of profit by selling or leasing the complete projects to investors.

Income Reits, on the other hand, allow individual players to invest in already completed and income-generating real estate projects and earn revenue primarily through rental income.

Mi Vida, which had earlier planned issuance of a Sh4 billion Development Reit in 2026, says the change in design and amount of its planned fund is geared toward addressing fast growing market demand for institutionalised real estate development.

The company adds that the just concluded management buyout that has seen the exit of the firm’s founding investor, private equity firm Actis, frees it up to tap into local capital to finance growth.

Mi Vida on October 16 announced its management team had signed an agreement to buy out Actis that had owned the property firm for seven years.

‘Much as it’s a management buyout, Mi Vida remains an institutional developer because it means now we have the capacity and the opportunity to bring onboard other local institutional capital,” Mi Vida CEO Sam Kariuki said.

“Because of the opportunity that we are seeing on the affordable housing side of the market, the plan has always been to raise a fund of some sort. We had planned a Development Reit but now want a hybrid whereby the fund takes on development risk while still holding Income Reit characteristics from a yield perspective.”

In setting up the hybrid real estate fund, Mi Vida will be looking to ride on its credentials having been granted the greenlight by the Capital Markets Authority in 2024 to act as a Reit manager in the market.

The company says the real estate fund will be Kenya shilling denominated and is banking on high double digit returns to woo international investors who would otherwise shy away from local currency exposure in their portfolio.

‘We are already at the early structuring stages of the fund and from the first quarter of 2026 we should be in the market talking to investors which will be local and also potentially international investors,” Mr Kariuki said.

“Even when we will be talking to international investors, they will be required to be comfortable with local currency exposure and as long as the fund yields something in the high teens and early twenties in total return it will meet their hard currency return requirements.”

Mi Vida’s planned hybrid fund will be joining the list of regulated assets that target crowding in more investors into real estate as an asset class. So far, ILAM Fahari I-Reit, Laptrust Imara I-Reit, Acorn I-Reit, and Acorn D-Reit are in the market with majority being listed in the Unquoted Securities Platform of the Nairobi Securities Exchange.

The Treasury earned Sh13.1 billion in five years from buying government paper using cash that investors have failed to claim in bank accounts, dividends and mobile money wallets such as M-Pesa.

The Unclaimed Financial Assets Authority (UFAA)-an agency under the Treasury-says it invested unclaimed cash worth Sh22.3 billion in buying Treasury bonds and bills between 2019 and 2024.

This earned it a cumulative return of 58.7 percent or Sh13.1 billion, with the cash being kept in a bank because there is no policy to guide the use of the earnings.

Unclaimed assets include money in bank accounts and dividends which have been dormant for more than five years, bankers’ cheques not cashed and contents in safe deposit boxes unclaimed for more than two years.

Insurance policies that remain uncollected for two years and cash sitting in mobile telephony wallets for the same period should be transferred to UFAA.

Unclaimed cash, shares and dividends surrendered to UFAA crossed the Sh75 billion mark in November last year, reflecting the difficulty in reuniting the idle wealth as investors, including tycoons, show disinterest in reclaiming the assets.

The law directs UFAA to invest half the unclaimed cash in Treasury bonds, 45 percent in Treasury bills and retain five percent as cash.

UFAA used Sh3.4 billion or a quarter of the income generated to finance its operations and kept Sh9.6 billion in cash despite the cash crunch in government.

‘This implied that the Authority was able to safeguard the unclaimed financial assets received from holders and, at the same time, make returns on investment. A portion of the returns from the investments was used to finance the Authority’s operations,’ said the Auditor-General in a report on UFAA.

UFAA’s reliance on the investment income to fund its operations more than doubled in the five years to Sh761.3 million last year, up from Sh354.6 million in 2019. There was no breakdown on how the UFAA used the amount.

‘The absence of such a policy may pose the risk of the country losing out on public investment opportunities that could uplift the economy,’ said the Auditor-General.

‘For instance, the amount of Sh9.6 billion in the Trust Fund account is a substantial amount to construct and equip a medical facility equivalent to the Kenyatta University Teaching and Referral Hospital, which cost approximately Sh10 billion,’ added the Auditor-General.

UFAA is holding on to the cash at a time the Treasury is battling a cash crunch in the wake of revenue shortfalls and mounting public debt that has cut the appetite for borrowing.

The State has been reluctant to introduce new taxes following the 2024 Gen Z protests that forced the withdrawal of the Finance Bill with Sh345 billion in new levies.

UFAA’s returns rode on the back of double-digit yields from government paper as the Treasury tapped the local debt market to plug budget shortfalls.

Last year, Treasury bonds offered returns as high as 18.5 percent while the average yield on Treasury bills was between 9.89 percent and 16.99 percent.

Government securities offered average returns of 13.64 percent in 2023 and 12.83 percent in 2022, ranking them among the best-performing asset classes at a time when the stock market was facing headwinds and real estate was yet to recover from the effects of Covid-19.

Returns from government securities have since dropped as the State races to cut its borrowing costs in line with the Central Bank of Kenya’s cuts on its benchmark rate.

Treasury bills have dropped to 7.82 percent and bonds to a range of between 12.65 percent to 13.53 percent.

Many Kenyans, said UFAA, remain uninterested in pursuing funds legally belonging to them or their families.

The authority reckons it had received Sh36.09 billion in cash in local and foreign currencies from Sh23.2 billion in 2021.

Billionaire businessmen, former powerful government officials and prominent politicians are in the long list of individuals with shares worth Sh39.4 billion that have been surrendered to the Treasury, up from Sh30 billion in 2021 and Sh16.42 billion in 2017.

The shares surrendered to the authority remained idle as UFAA did not have a mechanism to receive and manage non-cash assets.

UFAA is not allowed under the law to operate a Central Depository and Settlement Corporation (CDSC) account, which is necessary for facilitating the transfer of unclaimed shares.

Surrendered safe boxes that are believed to contain jewelry, title deeds, share certificates and Treasury bills rose to 3,737 units from 1,953 in June. Over 9.87 million unit trusts whose values were not disclosed are also part of the idle assets.

The money is largely held by insurance companies, banks, pension schemes, legal firms, mobile phone money wallets and saccos, among others.

So far, the authority has reunited less than 10 percent of the billions worth of shares and cash with beneficiaries, representing 1.9 percent of the unclaimed assets.

Kenyans have failed to claim Sh3.2 billion lying idle in M-Pesa wallets, with Airtel and Telkom Kenya subscribers having Sh114.3 million and Sh7 million, respectively.

Some of the unclaimed assets are linked to the deceased having kept their wealth secret and the absence of Wills.

Nairobi’s Eastern, Northern and Southern bypasses, as well as their link roads, have a unique, but also annoying, history. It ended well, though, bespeaking the late Raila Odinga’s boldness in driving public good.

The bypasses, which provided much-needed relief to local and transnational traffic that did not enter the city centre, had been projected and planned for in the 1970s.

Since the corridors traversed private land, compulsory acquisition was done, and those affected were compensated. But the acquisition was not followed up with construction.

For years, life went on, with the corridors remaining unclaimed and hence available for all manner of land uses, other than the reserved one. Ultimately, politically correct operatives in the Kanu government, famous for high levels of public land-grabs, ‘discovered’ them.

With the connivance of those in public offices, the corridors were quickly re-planned into plots and subsequently allocated. The construction of palatial houses, and, in some cases, offices, followed and were completed in the 1990s.

It remains rather intriguing how people entrusted with leadership have lost vision and compromised, rather than protected, such vital public corridors.

It was then that the Council of the Institution of Surveyors of Kenya (ISK), which was privy to the bypass corridors grabbing, flagged the matter publicly.

It teamed up with Odinga, then minister for Roads, Public Works and Housing, to push for the opening up of the corridors. The ISK provided hard evidence of the public land grabbing by private individuals.

Convinced that there was a good case, and supported by an able team of his then Assistant Minister, Joshua Toro, PS Erastus Mwongera, Odinga confronted this seemingly insurmountable challenge boldly.

He was not deterred by the fact that the corridors had been re-planned and allocated at a high level, and that the beneficiaries were well-connected and influential persons.

Odinga provided focused and resolute leadership at a most needed moment. As the then chairman of the ISK Council, I witnessed the bureaucracy, the technical and political obstacles that he and his team had to relentlessly navigate.

The ministry went on to issue public notices, asking beneficiaries in the corridors to vacate, or else be evicted. Most resisted. Some went to court.

However, between 2004 and 2005, they were evicted, and developments were demolished, with construction of the bypasses commencing.

Ultimately, the bypasses were opened up and gradually constructed. Today’s leaders must learn to be bold in advancing and protecting public lands and resources, despite the risks.

Confronting threats and obstacles in the pursuit of the public good is what defines good leadership. On this, Odinga provided a powerful model.