Diaspora inflows stabilise shilling as Kakuzi bullish

The foreign exchange reserves held by the Central Bank of Kenya hit a new high of $11.2 billion (Sh1.45 trillion) in the week ended July 11 on rising diaspora remittances, providing a solid ground for the local currency’s stability.

Remittance inflows to Kenya totalled $423 million in June 2025 from $372 million in June 2024, an increase of 13.8 per cent. The 12-month cumulative inflows to June 2025 increased by 12.1 per cent to $5.08 billion compared to $4.5 billion in a similar period in 2024.

The steady growth in remittance inflows remains a key source of foreign exchange earnings and continues to support the balance of payments.

Data from the weekly bulletin by the banking regulator shows the shilling remained stable against major international and regional currencies, exchanging at Sh129.24 to the US dollar.

Experts at Standard Chartered Bank Kenya said the stable shilling will shield consumers from the effects of tough trade policies by the US government and is likely to ease the import bill, pushing down the cost of basic goods and services.

The money market remained liquid during the week and so did the investor confidence in government securities.

The Treasury bill auction of July 10 received bids totalling Sh22.8 billion against an advertised amount of Sh24 billion, representing a performance of 94.9 per cent. Interest rates on the 91-day, 182-day and 364-day Treasury bills remained stable. The reopened 20-year and 25-year bonds received bids totalling Sh76.9 billion against an advertised amount of Sh50 billion, representing a performance of 153.8 per cent.

This is a recovery from acute undersubscriptions witnessed in the past two weeks.

In the equities market, agricultural portfolios commanded the prices gain trend at the Nairobi Securities Exchange led by Kakuzi whose share price rose by 8.2 per cent to hit Sh400.

Kakuzi has been bullish at the Nairobi bourse in the past year with a 52-week range of Sh355.25-440.

Analystts attribute this to the firm’s focus on a mixed agricultural portfolio to mitigate the profit cycle risk to which agriculture has historically been subjected.

Speaking at the Murang’a County Investment Conference, Kakuzi Plc managing director Chris Flowers said the firm is lining up several capital investment projects valued at more than Sh1.2 billion in the medium term to accelerate its commercial and social impact.

Investors at Kapchorua Tea gained close to Sh20 per share during the week after its share price went up by 6.45 per cent to close at Sh321.50. Another listed tea firm, Williamson Tea Holdings featured on top gainers list for the week after its share rose by four per cent to Sh239.75.

It was, however, a bad week for investors at Sameer Africa Limited after gains witnessed in past weeks were washed down the drain, with its share price depreciating by a near 10 per cent to close the week at Sh5.42 from Sh6.02.

Generally, there were increased activities at the bourse, with the NASI, NSE 25 and NSE 20 share price indices increasing by 0.1 to 1.7 per cent.

Market capitalisation increased by 0.1 per cent, while equity turnover and total shares traded, decreased by 30 per cent and 35 per cent respectively.