*Kenyan Market Brief – Monday, June 16, 2025* 🇰🇪 *Macro & Policy Update* * GDP Forecast Lowered: The Central Bank of Kenya trimmed its 2025 growth forecast to 5.2% and 2026 to 5.4%, cutting the policy rate to 9.75%—a steady but cautious move aimed at economic support. * Budget Strategy: No new taxes proposed in the June budget. Instead, it targets fiscal discipline via base broadening and spending cuts to reduce the deficit to ~4.5% of GDP. *Market Performance* * Equity Indices: In the week ending June 12, Nairobi's main indices rose—NASI by +9.2%, NSE 25 by +5.0%, NSE 20 by +2.4%. Turnover surged 167%, equity volume jumped 90%, reflecting strong investor activity * Treasury Bills & Bonds: The recent 91-, 182-, and 364-day T-bill tenders were oversubscribed (bid-cover ~237%), with yields declining—signalling demand amid lower policy rates * FX Market: The shilling steadied at ~KES 128.90–129.40/USD, supported by a stable trade environment and remittance inflows. *📉 Sector & Liquidity Trends* Banking Sector: Increased lending remains a concern due to elevated debt ratios and cautious credit extensions Private Sector Growth: The April PMI hit a 27-month high (~52.0), led by robust activity in services, agriculture, and construction—though future sentiment is subdued Capital Market Pulse: NSE equity turnover hit KES 18.4 bn (vs 8.9 bn prior week); bond turnover rose ~19%; Eurobond yields eased slightly *What to Track* * Budget outcomes: Monitor for clarity on revenue and deficit plans. * Private sector lending: Will new policy action ease credit constraints? * Global sentiment correlation: Middle East tensions may boost shilling stability via safe-haven inflows. * NSE Volume Trends: Sustained foreign participation could fuel further equity rally. Kenya’s economy and markets show signs of resilience: supporting rates, strong investor activity, and liquidity demand. Watch upcoming budget execution and credit flows—they’ll shape the next phase of economic recovery.