Despite new major corporate bond issues by Safaricom and EABL in 2025, secondary trading on the Nairobi Securities Exchange (NSE) has remained sluggish. Total corporate bond turnover rose to Sh840 million last year from just Sh40,000 in 2024 but is still far below peaks of Sh12.47 billion recorded in 2010, according to the Capital Markets Authority (CMA).
EABL raised Sh16.76 billion at 11.8 percent interest from its Sh20 billion medium-term note programme, while Safaricom issued Sh20 billion from its approved Sh40 billion green bond. However, CMA noted that these late-year issuances did little to stimulate secondary market activity. “Overall liquidity in the corporate bond segment remained constrained despite renewed issuer participation in the fourth quarter,” the regulator said.
Analysts say most investors in corporate bonds, primarily institutions and high-net-worth individuals, prefer holding bonds to maturity, limiting opportunities for trading and dampening market liquidity. For example, the five-year EABL bond is seen as a short-run instrument that encourages a hold-to-maturity approach. Wesley Manambo, a research analyst at Standard Investment Bank, noted, “Investors are likely to retain papers due to superior returns compared with government bonds and a favourable risk profile.”
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Currently, the NSE hosts several active corporate bond issuers including EABL, Safaricom, Family Bank, Kenya Mortgage Refinance Company, and Linzi Finco, with outstanding bonds valued at Sh87.1 billion. Linzi’s asset-backed bond accounts for the largest share at Sh44.8 billion, while fund managers and nominee accounts hold 82 percent of the debt, followed by investment companies and banks at 10 percent and six percent, respectively.
