The Nairobi Securities Exchange (NSE) has announced sweeping changes to single stock futures contracts and initial margin requirements, in a move aimed at boosting liquidity and making the derivatives market more accessible to investors.
The changes, which follow consultations with market participants, will take effect from October 1, 2025, and apply to some of the country’s most actively traded equities, including Safaricom, KCB Group, Equity Group, and ABSA Bank Kenya.
According to the market notice issued on Thursday, the contract size for single stock futures has been revised from 1,000 shares per contract to 100 shares per contract. The adjustment applies to a wide range of listed firms such as East African Breweries (EABL), British American Tobacco Kenya (BAT), NCBA Group, Co-operative Bank, Standard Chartered Bank Kenya, and Britam Holdings.
The NSE said the change is designed to encourage broader investor participation by lowering the cost of entry. Previously, the 1,000-share threshold placed the instruments beyond the reach of many retail investors.
“This adjustment will improve market depth and create more opportunities for hedging and speculation,” the NSE statement noted.
Alongside the reduction in contract sizes, the exchange has also published new initial margin requirements. These represent the minimum amount an investor must deposit to open a futures position.
For instance, the initial margin for Safaricom futures has been set at KES 550 in December 2025, rising to KES 4,500 by September 2026. KCB Group contracts will require KES 350 initially, rising to KES 4,000 over the same period.
Equity Group, ABSA, EABL, BAT Kenya, and NCBA all have updated margin levels that scale higher as contracts approach their expiry dates.
The NSE explained that the revisions reflect both the reduced contract sizes and updated risk calculations based on market volatility.
Changes also extend to index futures such as the NSE 25 Share Index and the Mini NSE 10 Share Index. For the NSE 25 futures, margins will rise from KES 2,320 in December 2025 to KES 18,000 in September 2026, while the mini index futures margins will increase from KES 1,100 to KES 9,000 over the same period.
These moves are intended to align Kenya’s derivatives market with global standards, ensuring adequate risk coverage while balancing affordability for investors.
The notice also clarified that clients holding existing December 2025, March 2026, and June 2026 positions will either receive margin refunds or be required to top up their accounts, depending on the direction of adjustment.
The NSE launched its derivatives market in July 2019 with the aim of diversifying Kenya’s capital markets. Despite initial challenges, the bourse has steadily expanded the range of instruments, adding equity and index futures to meet rising demand for risk management tools.
While the revised structure is expected to spur growth, challenges remain. Low investor awareness, limited market education, and thin liquidity continue to hinder the derivatives segment.
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