Kenya’s pension schemes significantly increased the value of their investments in listed equities during 2025, buoyed by a strong rally at the Nairobi Securities Exchange (NSE). The value of quoted equities held by retirement schemes rose to KES 312.8 bn in the year ended December 2025, representing a 54.6% increase from KES 202.3 billion recorded a year earlier.
Data from the Retirement Benefits Authority (RBA) shows that the rise was largely driven by appreciation in stock prices rather than large-scale purchases of additional shares. The rally in major blue-chip counters, most notably Safaricom Ltd, East African Breweries Ltd (EABL), and leading tier-one banks, including Equity Group, KCB, and Co-operative Bank boosted the market value of pension funds’ existing portfolios, increasing the share of quoted equities within total pension assets. As a result, the allocation of pension assets to listed equities rose to 11.1% of total industry assets, up from 9.0% in the previous year.
The performance of the stock market played a key role in the growth. The NSE experienced a broad-based rally supported by improving corporate earnings, stable macroeconomic conditions and growing investor confidence. Market indicators also strengthened, with the Nairobi All Share Index (NASI) rising sharply by 22.0% during the six month period, reflecting improved performance across many listed counters.
Several large companies led the market upswing, including telecommunications, banking and consumer goods firms whose share prices recorded strong gains during the year. The rally lifted overall market capitalization on the NSE to approximately KES 2.9 trillion, compared with KES 1.9 trillion a year earlier.
Despite the surge in equity valuations, pension schemes in Kenya continue to maintain a conservative asset allocation structure. Government securities remain the dominant investment class, accounting for about 52.2% of total pension assets, reflecting the sector’s continued preference for stable and lower-risk investments. Overall, the pension industry recorded significant growth during the year, with total assets under management rising to about KES 2.8 trillion, supported by higher contributions and improved investment returns.
While equities currently represent a relatively modest portion of pension portfolios compared to fixed-income instruments, the rally at the NSE has highlighted the importance of capital markets in enhancing long-term returns for retirement savers. Continued diversification across asset classes, including equities, property and alternative investments, is expected to play an increasing role in supporting the growth and resilience of Kenya’s pension sector. (start your investment journey today with the cytonn money market fund. Call + 254 (0)709101200 or email sales@cytonn.com)
