US investors raise Kenya portfolio holdings to four-year high

American investors, both individuals and corporates, have shown renewed interest in Kenya's financial markets, increasing their portfolio holdings by 45 percent in 2025 to Sh258 billion ($1.9 billion). This marks the highest level in four years and highlights a significant turnaround in investor sentiment. The increase in portfolio holdings is attributed to growing appetite for Kenyan securities among US and other international investors.

According to data from the US Department of the Treasury, the increase in American-held portfolios in Kenya was among the largest annual gains on record. US investors' portfolio holdings in Kenyan equities and debt securities increased by Sh80 billion ($615 million) from Sh178 billion a year earlier. This marks a second consecutive year of growth following a four-year decline. The growth in portfolio holdings is a positive indicator for Kenya's financial markets.

The increase in US investors' portfolio holdings in Kenya came against a backdrop of foreign investor outflows from several emerging and frontier markets. Global investors reassessed their exposure to riskier assets amid geopolitical tensions and uncertainty over US trade policies. Despite these challenges, US investors showed renewed interest in Kenyan financial assets, particularly government debt, which accounts for the bulk of US portfolio investments in the country.

American investors' portfolio holdings in Kenya comprise equities and long-term debt securities, with the latter accounting for the overwhelming majority of their exposure. Investments in equities recorded the fastest growth during the year, almost doubling to Sh27 billion ($204 million) in 2024. This growth coincided with a recovery in the local stock market, with the Nairobi All Share Index gaining 24.3 percent in the first half of 2025.

The growth in US investors' portfolio holdings in Kenya also coincided with a decline in domestic interest rates, creating an opportunity for investors to lock in relatively attractive returns on longer-dated securities. Treasury Bill rates averaged 8.7 percent in June 2025, down from 16.5 percent a year earlier. The government continued to offer relatively attractive returns on long-term Treasury securities and infrastructure bonds, potentially supporting demand from foreign investors.

According to Daniel Mainda, the chief executive of the Nairobi International Financial Centre, the increase in American holdings points to renewed interest in Kenyan financial assets. Mainda attributed the growth to the agility of the country's thinking and products, as well as deliberate steps to ensure that the economy thrives in core pillars of order. The growth in US investors' portfolio holdings is a positive development for Kenya's financial markets.

Despite the recent recovery, American holdings of Kenyan securities remain below the pre-Covid peak of Sh390 billion ($3 billion). US investors' holdings in Kenyan long-term debt securities increased by 42 percent to Sh231 billion ($1.785 billion), up from Sh164 billion ($1.261 billion) a year earlier. This accounts for nearly 90 percent of their total portfolio.

Key points

• US investors increased their portfolio holdings in Kenya by 45 percent in 2025 to Sh258 billion ($1.9 billion).
• The growth in portfolio holdings is attributed to growing appetite for Kenyan securities among US and other international investors.
• American holdings of Kenyan securities remain below the pre-Covid peak of Sh390 billion ($3 billion).