Foreign investors recorded a KES 11.6 billion net outflow in 2025 at the Nairobi Securities Exchange (NSE), the 6th year in a row they were major sellers, even as the NSE experienced its strongest performance in over a decade, with the Nairobi All-Share Index (NASI) gaining 51.1%, marking its best year since its inception in 2008.
The NSE 20 Share Index similarly surged by 56.13%, its best performance since 2003, while the total market capitalization expanded from KES 1.94 trillion to KES 2.82 trillion over the same period. As of January 5, 2026, market capitalization at the NSE reached KES 2.94 trillion.
Despite the market’s record-breaking growth, non-local investors were net sellers for much of the year 2025. In August 2025 the net foreign purchases hit a four-year high of KES 1.65 billion, but the sentiment dropped in September. In the first week of September alone, foreigners sold KES 3.35 billion worth of equities against only KES 2.17 billion in purchases, resulting in a net outflow of KES 1.18 billion.
By mid-September, cumulative outflows for the month reached KES 1.7 billion, erasing all of August’s gains, and September ended with net foreign sales of 4.97 billion. This dropping trend continued to December, ending with a net sale of 11.6 billion in 2025.
Foreign Investors Concentration in Blue-Chip Stocks
Foreign activity has been concentrated in high-value, liquid stocks. Safaricom PLC, closing at KES 28.35 in 2025 continued to dominate the trading churn, accounting for the majority share of foreign flows. Major banks like Equity Group, KCB, and Diamond Trust Bank (DTB) also saw significant foreign selloffs. Analysts attributed this retreat to aggressive profit-taking by offshore funds looking to capitalize on the 2025 rally.
Additionally, investors shifted capital to US markets in anticipation of Federal Reserve rate cuts, which were expected to spark rallies in the United States. The persistent regulatory opacity surrounding fiscal policy and sector-specific interventions, alongside foreign exchange market inefficiencies which elevated the perceived country risk premium, caused many institutional investors to maintain underweight positions relative to other frontier markets.
The departure of the non-local investors is reshaping the NSE’s liquidity and valuation structures. The market’s record gains have been sustained by local institutional and retail investors who have stepped in to fill the vacuum left by offshore funds. This shift has allowed the market to remain resilient even during periods when foreigners accounted for as most of total market sales.
The locally driven momentum has pushed a record 13 NSE stocks to more than double in value by the end of 2025. Notable performers include Uchumi Supermarket Plc at 505.88% growth, Sameer Africa Plc 486.42%, Home Africa Ltd 262.16% and Olympia Capital at 193.53% among others.
Also read: NSE Ends 2025 on a High Note as NASI Records a Stunning 51% Rise
