Kenya, emerging markets tipped for more investments

Standard Chartered Bank Head of Affluent and Wealth Management Paul Njoki. [File, Standard]

Kenya and other African markets are poised to attract increased investor interest in 2026 as capital shifts towards emerging market assets, according to Standard Chartered’s annual investment outlook released yesterday. 

In its Global Market Outlook 2026, the bank’s Wealth Solutions Chief Investment Office notes that while developed market valuations are still high, there is a growing preference for emerging market (EM) bonds and assets due to favourable yields, better credit quality, and the need for diversification.

According to the report, “Emerging Market bonds, both US dollar and local currency, are expected to outperform Developed Market bonds in 2026.”

It points out that capital inflows into markets like Kenya could boost commodity prices and improve returns on non-US assets due to the expected easing of global monetary policy and possible weakening of the US dollar.

As global portfolios shift, the outlook points to a structural opportunity for African corporate and sovereign debt.

It also highlights the increasing impact of long-term investments in infrastructure, technology, and sustainable sectors made by sovereign wealth funds from areas such as the Gulf.

“Gulf nations make long-term, well-planned investments. Africa can learn a lot from this kind of patient capital,” says Paul Njoki, head of affluent and wealth management for Kenya and East Africa at Standard Chartered Bank. 

The report supports Kenya’s need for diversified investment strategies that strike a balance between exposure to commodities, income-generating assets, and global growth prospects. 

The three main pillars of Standard Chartered’s investment strategy for the year are diversifiers like gold and certain currencies, income from outperforming EM bonds, and stocks in markets like the US and Asia, excluding Japan. 

The report says Africa’s improving macroeconomic fundamentals and demographic trends position the continent to draw sustained capital flows in the upcoming year.

According to the report, although artificial intelligence and technology-driven growth still have an impact on global equities, the current cycle is different from previous market booms, allowing for more diversified and balanced investment strategies.

The trend towards emerging markets highlights the increasing significance of corporate and sovereign debt markets for African economies like Kenya, as international investors reposition their holdings in anticipation of loosening global monetary policy and a declining US dollar.