Safaricom, EABL spark corporate bonds frenzy

Double-digit returns offered by notes listed on the Nairobi Securities Exchange (NSE) in 2025 appear to have fuelled nearly an 80 per cent increase in pension assets allocated to corporate bonds.

New regulatory data shows that pension funds invested in commercial paper and corporate bonds grew by 77.6 per cent in 2025, the highest since the Covid pandemic, reflecting a renewed appetite for high-yield fixed-income assets.

The data similarly shows returns on the same improved by 53 per cent in 2025 compared to 2024, crossing the Sh2 billion mark.

The numbers from the Retirement Benefits Authority (RBA) show that in 2025, assets in commercial paper and corporate bonds closed at Sh17.4 billion compared to Sh9.9 billion in 2024.

This is the highest growth the sector has witnessed in this asset class in the last five years.

In 2022, the figure stood at Sh6.9 billion, having grown by 18.9 per cent from Sh5.8 billion in 2021. In 2023, growth in this asset class slowed to 2.9 per cent, settling at Sh7.1 billion.

The following year saw a jump of 38 per cent, closing 2024 with Sh9.8 billion. In 2025, this figure grew by Sh7.5 billion to Sh17.4 billion, a 77.6 per cent jump.

The 2025 growth coincides with the listing of two major bonds by East African Breweries Ltd and Safaricom, which sought to raise in excess of Sh25 billion through corporate bonds. Both listings were individually oversubscribed at over 150 per cent. 

Despite the high growth witnessed in the commercial and corporate bonds asset class, its share in total invested assets is still below one per cent, closing the 2025 period at 0.64 per cent.

Government paper still dictates much of the Sh2.7 trillion investment assets, with Sh1.4 trillion allocated to the securities.

“The retirement benefits industry remained significantly invested in Kenyan government securities, which accounted for 50.98 per cent (Sh1.39 trillion) of total assets in 2025, followed by guaranteed funds (20.61 per cent), quoted equities (10.20 per cent), and immovable property (9.09 per cent),” says RBA in its update.

In 2025, EABL listed a Sh11 billion bond as the first tranche of a Sh20 billion paper at a rate of 11.8 per cent. The company raised Sh16.8 billion in the oversubscribed paper.

Safaricom, on the other hand, listed its tax-free green notes, seeking to raise Sh15 billion, which was oversubscribed, attracting bids worth Sh41.4 billion. Its rate is 10.4 per cent.

Already, those who took part in this investment are starting to reap its benefits as Safaricom paid its first interest payment on June 11, 2026, at the said fixed rate of 10.4 per cent.

Both papers were listed at the tail end of 2025, and it was during this period that the NSE broke the Sh3 trillion mark, for the first time, in market capitalisation.

This figure is now inching closer to Sh4 trillion. Coinciding with this jump, the data shows, is also an increase in the size of investments in the quoted equity asset class. Quoted equities are shares of firms listed on the stock exchange.

“Compared to 2024, most asset classes recorded growth, with notable increases in Kenyan government securities, guaranteed funds, quoted equities, and offshore investments, largely driven by improved market performance, attractive returns, and continued portfolio diversification by retirement benefits schemes,” says RBA in the update.

The data shows investment in quoted equity grew by 46.8 per cent in 2025, more than twice the 2024 increase recorded in 2024 figures to settle at Sh277.5 billion.

The Sh277.5 billion is a growth from the Sh189 billion recorded in 2024. In 2024, this amount had grown by 20 per cent from the Sh157.5 billion recorded in 2023.

The size of investments in this asset class had been on a slow growth in the last few years, dropping from Sh252.1 billion in 2021 to Sh213.8 billion in 2022 and further to Sh157.5 billion in 2023.

The strategy to take advantage of the waves of the stock exchange by fund managers seems to be paying off as investment income on quoted equities shot up by almost Sh6 billion to Sh19.6 billion in 2025, a growth of 42 per cent.

Similarly, investment income from the commercial and corporate bonds asset class hit Sh2 billion in 2025. Data shows this is a 53 per cent growth when compared to 2024 figures.

The Sh2 billion investment income is more than three times the Sh604.4 million recorded in 2021.

Total investment income in the period grew 23.69 per cent to Sh274.8 billion.

“Total investment income increased from Sh222.2 billion in 2024 to Sh274.8 billion in 2025, reflecting the strong performance of the investment market in 2025, which yielded high returns on retirement benefits funds,” says RBA.

Even so, Kenyan government securities remain the main source of investment income, contributing 60.3 per cent of total income, followed by guaranteed funds (21.4 per cent) and dividends from quoted shares (7.1 per cent).

“We are in times when our market is at its best. For those who are not in the market, perhaps you need to think about it. This is where people are making money,” noted Capital Markets Authority (CMA) Chief Executive Wyckliffe Shamiah, during the launch of East Africa’s social impact report.