Market Insights & Research

The Monetary Policy Committee's decision to hold rates steady signals a pause in the easing cycle that began in mid-2024. For investors, this has important implications across asset classes.

Equity Impact: A stable rate environment is broadly positive for equities. Banking stocks benefit from predictable margins, while rate-sensitive sectors like real estate see continued support from relatively affordable credit.

Fixed Income: Treasury yields have stabilized, making the 91-day T-bill less attractive at 9.2%. We recommend investors with short-term horizons consider infrastructure bonds for superior after-tax yields.

Our Positioning: We're maintaining our overweight on financials and selectively adding telecoms exposure. For conservative investors, a blend of bank stocks and infrastructure bonds offers an attractive risk-reward profile.

After extensive fundamental analysis, valuation modeling, and macro overlay assessment, our research team presents five stocks we believe offer exceptional upside potential in 2026.

1. Equity Group Holdings (EQTY) Target: KES 290 | Upside: 22% Kenya's largest bank by assets continues to deliver industry-leading ROE above 25%. The regional expansion into DRC and Tanzania is now contributing meaningfully to earnings.

2. Safaricom PLC (SCOM) Target: KES 42 | Upside: 18% M-Pesa's evolution into a full financial services platform is underappreciated. Ethiopia operations approaching breakeven will be a major catalyst.

3. KCB Group (KCB) Target: KES 48 | Upside: 25% Post-merger integration synergies are ahead of schedule. The combined entity offers the most compelling valuation in East African banking.

4. East African Breweries (EABL) Target: KES 185 | Upside: 20% A contrarian pick trading at trough margins. Cost restructuring and new product launches should drive a margin recovery.

5. BAT Kenya (BAT) Target: KES 420 | Upside: 15% Defensive cash flow machine with a 9% dividend yield. Ideal for income-oriented portfolios seeking stability.

Investing in the Nairobi Securities Exchange is one of the most powerful ways to build long-term wealth in Kenya. Here's everything you need to know to get started.

Step 1: Open a CDS Account The Central Depository System (CDS) account is your gateway to the NSE. Visit any licensed stockbroker to open one — you'll need your national ID and KRA PIN.

Step 2: Choose a Stockbroker Your broker executes trades on your behalf. Look for one that offers research support, competitive commissions, and an easy-to-use trading platform.

Step 3: Fund Your Account Deposit funds into your broker's client account via bank transfer or mobile money. Most brokers accept M-Pesa.

Step 4: Research Before You Buy Never invest blindly. Study the company's financial statements, understand its business model, and consider the current valuation. This is where professional advisory services like ours add tremendous value.

Step 5: Place Your Order Instructions can be given via phone, email, or your broker's online platform. You can place market orders (buy at current price) or limit orders (buy only at your specified price).

Step 6: Monitor and Review Investing is a marathon, not a sprint. Review your portfolio quarterly and rebalance as needed. Stay informed with quality market research.

As we enter the 2026 dividend declaration season, income investors should position their portfolios to capture attractive yields from Kenya's best dividend payers.

Highest Yielding NSE Stocks:

| Company | Expected Yield | Payout Ratio | |---------|---------------|-------------| | BAT Kenya | 9.2% | 85% | | Stanbic Holdings | 7.8% | 45% | | Total Energies Kenya | 7.5% | 70% | | Equity Group | 5.1% | 35% | | Safaricom | 4.8% | 65% |

Our Dividend Portfolio Strategy: We recommend a blend of high-yield defensives (BAT, Total Energies) and growth-plus-income names (Equity, Safaricom). This combination targets a portfolio yield of 6-7% while maintaining capital appreciation potential.

Key Dates to Watch: Most declarations happen between March and June. We'll send alerts as ex-dividend dates are announced so you can position accordingly.