Despite failing to attract new listings, East African stock exchanges defied domestic and external headwinds to end the year strongly, with key indicators such as market turnover, capitalisation and trading activity rising.

 

The region’s economies face macroeconomic and political pressures, including escalating regional conflicts and the risk of global trade wars triggered by US tariffs, which threaten foreign investor outflows.

Over the past year, East African markets were weighed down by a prolonged initial public offering (IPO) drought, compounded by a resurgence of private equity deals as firms opted to raise capital off-market to avoid stringent listing and disclosure requirements.

None of the region’s main bourses — the Nairobi Securities Exchange (NSE), Uganda Securities Exchange (USE), Dar es Salaam Stock Exchange (DSE) and Rwanda Stock Exchange (RSE) — recorded a single IPO last year.

NSE chief executive Frank Mwiti acknowledged the IPO drought, saying it is being addressed under a new transformation strategy targeting both State-owned and private enterprises.

Despite the lack of IPOs, the NSE regained momentum, with market capitalisation crossing the Sh3 trillion ($23.25 billion) mark for the first time and the NSE All-Share Index rising by more than 18 percent, outperforming several frontier peers and signalling renewed domestic and foreign institutional investor confidence.“As we close the curtain on 2025, I’m filled with immense pride in what we have collectively achieved. This hasn’t been a year of recovery; it has been a year of redefinition. We are no longer just witnessing a market recovery; we are architecting a capital markets renaissance for East Africa,” Mr Mwiti said.“Our outlook for 2026 is not merely optimistic; it is strategic. As we enter the second year of our 2025–2029 strategy, our focus shifts from stabilising the foundations to scaling the heights.”Corporate bondsIn Rwanda, the RSE did not list any new companies in 2025, but focused on corporate bond issuances. Four bonds worth Rwf33 billion ($22.53 million) were issued; three by small and medium-sized enterprises and one by the International Finance Corporation (IFC).

The RSE closed the year with a turnover of Rwf187.84 billion ($128.25 million), surpassing the previous high of Rwf129.42 billion set in 2024, while market capitalisation reached Rwf4.65 trillion ($3.17 billion).

RSE chief executive Celestin Rwabukumba attributed the performance to improved economic conditions.“Rwanda is stable and steadily growing,” he said, citing price stability, liquidity and a favourable business environment.

In Tanzania, DSE market capitalisation rose to Tsh23.99 trillion ($9.7 billion) in 2025 from Tsh17.86 trillion in 2024, while the All-Share Index climbed to 2,761.93 from 2,139.73.

Equity turnover in the three months to December 31 increased to Tsh135.68 billion ($54.87 million) from Tsh101.12 billion a year earlier.

Kenya has not recorded a corporate IPO since the NSE’s self-listing in 2014. Last year, Shri Krishana Overseas Plc listed by introduction on the SME segment.

The reformsThe NSE is now targeting a major share sale of the State-owned Kenya Pipeline Company (KPC), after the government announced plans to sell a 65 percent stake valued at Sh100 billion ($775.19 million).

The Capital Markets Authority (CMA) has not received a concrete listing proposal for two years following the enforcement of revised Public Offers, Listing and Disclosure Regulations in 2023, despite the rules being viewed as more issuer- and investor-friendly.

Investor interest shifted to high-yield government bonds, undermining IPO prospects. The revised regulations, gazetted in December 2023 and approved in April 2024, abolished the mid-cap Alternative Investment Market Segment (AIMS) and the Growth Enterprise Market Segment (GEMS), while easing listing requirements.

The CMA is pursuing further reforms to attract listings on the Main Investment Market Segment and the SME board.

In Uganda, the USE went six years without a listing before Cipla Quality Chemical Industries and Airtel Uganda listed in 2018 and 2023, respectively. Rwanda waited five years before the government sold its stake in I&M Bank Rwanda in 2017.

In Tanzania, Vodacom Tanzania was listed in 2017 following rules requiring foreign telecom firms to float at least 25 percent of their shares locally. The DSE self-listed in 2016.

Market integrationRegional exchanges have set up investment clinics and pursued market integration to lower trading costs, though progress has been slow.

Uganda, Rwanda and Tanzania have interconnected their trading systems under the Capital Markets Infrastructure (CMI) platform. Kenya exited the project in 2015 over procurement concerns but rejoined last year, a key milestone given Nairobi’s status as the region’s largest market with 64 listed firms, many cross-listed elsewhere.

Ethiopia launched the Ethiopian Securities Exchange (ESX) in January 2025, ending a 50-year absence of a stock market. The country last had a functioning exchange until 1974, when Emperor Haile Selassie was overthrown and share trading abolished.

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