NSE Secondary Bond Market Hits Sh2.7 Trillion in 2025 | Expert Analysis

NSE Secondary Bond Market Hits Sh2.7 Trillion in 2025 | Expert Analysis

NSE Secondary Bond Market Hits Sh2.7 Trillion in 2025 — Expert Analysis

By Postine Ngeli | January 19, 2026

Note: Figures refer to calendar year 2025 only and do not include trading in 2026. Source

Year-on-Year Market Turnover

Year Secondary Bond Turnover
2024 Sh1.5 trillion
2025 Sh2.7 trillion
2024: Sh1.5 Trillion turnover 2025: Sh2.7 Trillion turnover; Top IFB premium 23% 2024 2025 Turnover (Sh Trillion) 1.5T 2.7T

Secondary bond market turnover comparison: 2024 vs 2025 (hover bars for details)

Top Premium Bonds in 2025

Bond Tenor Premium Above Par Notes
8.5-year IFB 21–23% High-coupon legacy bond; actively traded
6.5-year IFB 14–15% Moderate premium, still active

Key Market Drivers

1. Falling Yields & Price Premiums

  • CBK base rate fell from 13% to 9%, lowering yields on new bonds.
  • Older high-coupon bonds traded at up to 23% above par.
  • Active trading concentrated in 8–12 year tenors.

2. Investor Participation

Investor Type Share of Volume Notes
Institutional ~65% Banks, pension funds, insurance dominate trading
Retail & HNIs ~25% CBK DhowCSD platform increased access
Foreign ~10% Focus on high-grade government securities

3. Market Structure Implications

  • Liquidity concentrated in benchmark and high-coupon bonds.
  • Thinly traded tenors remain sensitive to rate changes.
  • Strategic opportunities exist for duration management and relative value trading.

FAQ — Expert Perspective

Q1: Does the Sh2.7 trillion turnover include primary issuance?

A: No, it is strictly secondary market trades.

Q2: Why did bonds trade above par?

A: Falling yields on new bonds made older high-coupon bonds more valuable.

Q3: Which investor segments drove the increase?

A: Institutions and retail investors via digital platforms like CBK DhowCSD.

Related Links

About the Author

Postine Ngeli — Capital markets analyst and founder of Money Market Hub Kenya. Specializes in fixed-income strategy, yield curve analysis, and Kenyan capital markets research.

Disclaimer

Informational only; not investment advice. Past performance is not indicative of future results. Read full disclaimer.

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