2026 Investment (Ideas)

#The #NairobiSecuritiesExchange was the top-performing African market, posing to be a new era of equity-led portfolios in 2025!

#How The addition of NSE companies to the MSCI Frontier Markets Index will affect foreign participation!

#Stock Markets vs Bond Markets!

Primarily driven by a decline in credit default risk after its partial buyback of the 2024 Eurobond, which renewed interest in Ksh-denominated assets. Also, increased inflows from diaspora remittances & global lenders supported forex reserves and reduced demand pressures. These are expected to continue supporting the Kenyan shilling in 2025.

In 2024, the Kenyan Equities market trading activity surged to KES 104.3Bn, a 59.5% uptick due to falling interest rates that led to the appeal of the equity asset class. The NSE 25 Index jumped 43.0%, due to a strengthening Kenyan shilling coupled with reduced credit default risks which renewed investor confidence in the equities market. The #NairobiSecuritiesExchange was the top-performing African market, posing to be a new era of equity-led portfolios in 2025.

Expect investors to move from fixed-income to the equities market, as they seek higher returns, as bond yields decline(falling rates). Low rates puts more money in consumers' pockets, increasing profits for companies in the NSE. Foreign participation will improve going into 2025 due to a stronger Ksh & the addition of NSE companies to the MSCI Frontier Markets Index =(global investment exposure to Kenya’s companies).

Expect stock markets to outperform bond markets+#MMFs+"holding cash"; and to be both a "defensive+offensive" play for investors in 2025. As you prepare to invest in 2025, a new era in equity markets of declining rates & unexpected shifts in govt policy; I recommend a periodical portfolio management approach that will increase your returns by creating an asset mix that balances appropriate risks and rewards. The market is changing—are you ready to take advantage?

# THE UNINTENDED IMPACT OF THE CURRENT LOWERING OF RATES!

Decreasing returns on govt securities is fast driving down yields on MMFs and Treasury bills to single digits. The return on the 91-day Treasury bill fell below 9% for the first time since 2022 in the latest auction, after the latest rate cut by the (CBK).

The 91-day T-bill was auctioned at an interest rate of 8.9697% in the first week of February 2025, down from 9.1156 in the previous sale. Because MMF managers primarily invest in govt papers, there has been a subsequent fall in yields for MMFs. Analysts say investors in MMFs should expect lower returns this year compared to 2024. What to do..>>> 

You may have entered investing with the hope of achieving quick, guaranteed returns. However, the reality is that returns vary and are rarely immediate. E.g, while the stock market provides returns of around 7% to 10% after inflation, these returns are not consistent year to year and include periods of both growth and decline. 

By setting realistic expectations, you’ll be less likely to make impulsive decisions out of impatience or disappointment. Avoid get-rich-quick schemes, which often come with high risk and little reward, and focus instead on tested strategies that steadily build wealth over time. Keep in mind that investing is a gradual process that requires you to stay patient, committed, and prepared for the natural fluctuations of the market. 

Before you start investing, it’s essential to have an emergency fund in place to cover unexpected expenses without dipping into your investments. This fund acts as a financial safety net, ensuring you won’t be forced to sell investments at an inconvenient time, which could result in losses.

Ideally, this fund should hold three to six months’ worth of living expenses and be kept in a liquid, easily accessible account, such as a high-yield savings account. Having an emergency fund provides peace of mind and allows your investments to remain untouched and continue growing, even in the face of unforeseen financial challenges.

Many new investors attempt to time the market, hoping to buy at low prices and sell high. However, market prices fluctuate due to unpredictable factors, including economic reports, global events, and shifts in investor sentiment, all of which contribute to short-term volatility and reacting to them can lead to missed opportunities. Instead of trying to time the market, it’s often more effective to adopt a consistent, long-term approach.

E.g, dollar-cost averaging—investing a fixed amount at regular intervals regardless of price—allows you to steadily build wealth without being concerned with short-term ups and downs. This reduces emotional-investing and provides a way to buy shares at various prices, ultimately balancing out over time. Committing to a long-term strategy can yield more stable returns and a clearer path to building wealth.

Investing can be complex, and seeking professional advice when you need it can make a big difference. A qualified financial advisor can assist with setting realistic goals, developing a tailored investment plan, and navigating complex topics like taxes and retirement planning.

Find an advisor who aligns with your needs. These experts can provide clarity and confidence as you build your financial strategy. Even a single consultation can be valuable in helping you make informed decisions and avoid common pitfalls as you start your investing journey:

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