Kenya’s capital markets are on the cusp of renewed vibrancy, and NCBA Investment Bank is determined to sit right at the center of it all to make more money for its customers.

Speaking on CNBC Africa’s Power Lunch East Africa, Muathi Kilonzo, Managing Director of NCBA Investment Bank, highlighted the shifts that are drawing both retail and corporate investors back into the market.

“The Kenyan market is witnessing some relative currency stability after some period of currency volatility,” Muathi said, pointing to one of the most critical factors underpinning investor confidence.

At the same time, interest rates have been easing dramatically, with the 91-day T-Bills dropping from the teens to below 8 percent.

This, he explained, is attracting investments, and driving investment flows.

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The result has been a surge of liquidity into the Nairobi Securities Exchange (NSE), but unlike past years when foreign investors dominated, it is domestic investors who are now in the driving seat.

“We are particularly busy with the normal retail investors trading both stocks and bonds,” Muathi noted.

Bond investments, once seen as the preserve of large corporates, are undergoing a revolution on the retail side, helped along by digital tools rolled out by the Central Bank of Kenya (CBK).

For many Kenyans, bonds are now just a click away, making the market more inclusive than ever before.

While volatility has impacted various sectors differently, banking remains an interesting sector, says Muathi, especially as lower interest rates are set to spur new credit growth.

Beyond finance, he highlighted government innovation in funding infrastructure projects, rising investor interest in renewable energy, and fresh momentum in consumer finance and agriculture.

Together, these sectors offer a fertile ground for long-term investors, accrding to the NCBA Investment Bank MD.

Spotlight on KPC IPO

Perhaps the most anticipated development is the September listing of Kenya Pipeline Company (KPC) at the NSE, with describing it as a potential watershed moment for Kenya’s capital markets.

“KPC IPO will be a fantastic opportunity. One thing a rallying market needs is a large good quality business that can come to the market,” stated Muathi.

He urged investors to seize the opportunity, adding: “What I would advise our clients and investors to do; if you are someone who is looking at having broad exposure to the market, then look at something at Unit Trusts and Equities, or even our Bond Fixed Income Fund.”

He noted that these presented interesting ways for them to get exposure to the trends that are happening, with interest rates downward trend set to raise the value of their bonds.

Regional Growth

With fintech, energy, and agribusiness sectors growth giving rise to regional mergers and acquisitions, the bank is leveraging its regional footprint to enable cross-border investment flows.

“Kenya is the largest capital market in East Africa hence the trends will continue to propel more Kenyan companies to continue looking at DR Congo and Ethiopia to entrench deeper cooperation in the region,” he said.

NCBA Investment Bank’s regional presence allows it to act as both a gateway for inward investment into Kenya and a bridge for Kenyan businesses looking outward.

Tech Edge

As the sector continues to adopt technology, and Artificial Intelligence (AI) in operations, NCBA Investment has not been left behind in using it in powering this transformation.

The bank now uses AI for faster decision-making, wealth management and advisory services, as digital tools are continuing to reshape the investment landscape in Kenya.

Muathi pointed out that AI will be “a very powerful enabler for finding appropriate investment to satisfy risk tolerance and returns preference for the bank’s clients.”

By reaching millions of customers through tech platforms, NCBA Investment Bank is democratising access to investment products like unit trusts, equities, and offshore funds.

Investors in Kenya, the NCBA Investment Bank MD observed, are now becoming more sophisticated and willing to take on new risks and explore new frontiers, unlike before.

Projecting Ahead

With interest rates easing, corporate bond markets reviving, and a landmark IPO around the corner, NCBA Investment Bank is positioning itself not just as a facilitator, but as a central player in shaping East Africa’s next wave of investment deal-making.