The Nairobi Securities Exchange (NSE) has made its most radical adjustment yet to the fledgling derivatives market, cutting contract sizes for single-stock futures by as much as 90 percent in a bid to lure more investors.
In a market notice issued on September 25, the bourse announced that, effective October 1, contract sizes for counters such as Safaricom, KCB Group, Equity Group, and Co-operative Bank will shrink from 1,000 shares to 100 shares. East African Breweries, British American Tobacco Kenya, and Standard Chartered Bank futures will drop from 100 shares per contract to just 10.
The move also comes with a sharp downward revision of initial margin requirements, the collateral investors must post to enter positions. Safaricom’s December 2025 futures contract, for instance, will now require only Sh350 in margin compared to about Sh2,450 previously.
KCB’s requirement has been reduced to Sh650 from over Sh5,000, while investors in Kenya Re will need just Sh125. “Following feedback from investors and participants, the Exchange has approved new contract sizes and initial margin requirements for single-stock futures to make the product more accessible,” the NSE said in the market notice.
By repackaging the product into smaller and cheaper units, the NSE is addressing persistent complaints that its derivatives market, launched in 2019, was out of reach for retail investors who dominate local equity trading. With the old contract sizes, a single position in Safaricom futures represented 1,000 shares, worth roughly Sh17,000 at current prices plus an upfront cash deposit.
“This effectively priced out the majority of retail participants, leaving liquidity shallow and uptake low,” said a Nairobi-based capital markets analyst. “Reducing contracts to 100 shares makes them tradeable in bite-sized units, which is in line with global best practice where exchanges introduce mini or micro contracts to spur retail activity,” he added.
Futures are financial contracts that allow investors to buy or sell an asset at a predetermined price on a set future date. Unlike ordinary share trading, where an investor pays the full amount for ownership, futures only require a margin deposit, typically a fraction of the contract value, making them a leveraged product. At the NSE, these contracts track some of the market’s most liquid stocks such as Safaricom, KCB, and EABL. They are widely used for hedging against price swings or for speculation, with gains and losses settled daily until expiry. While they can deliver outsized returns from small price movements, they also carry higher risk than buying shares outright. The need for reform is clear from the market’s performance since launch.
Gulf Energy affiliate Auron Energy buys Tullow for Sh18.2B
Auron Energy E&P Ltd., an affiliate of Nairobi-based Gulf Energy, has acquired Tullow Oil Plc’s Kenya business in a $120 million (Sh18.2 billion) deal that transfers ownership of the country’s only commercial oil discovery to local hands. The transaction, first announced in July, gives Auron full control of Tullow Kenya BV, which holds the Turkana oil fields discovered in 2012. Tullow has already received an initial payment of $40 million (Sh6.1 billion), with the balance due in stages, and will retain rights to royalties on future production under certain conditions.
“We are delighted to complete this transaction and to bring these assets under the stewardship of Gulf Energy. This project will play an important role in advancing Kenya’s domestic energy sector, creating opportunities for growth and development in the Turkana region, as well as supporting the country’s long-term energy security,” said Paul Limoh, chief executive officer of Gulf Energy. For Gulf Energy, a downstream fuels and power player now stepping into upstream oil, the acquisition marks a strategic leap. The company inherits a project that has absorbed more than $2.04 billion (Sh310 billion) in exploration and appraisal spending by Tullow and its partners over the past decade, according to company filings.
The Turkana oilfields were once hailed as a game-changer, with recoverable reserves estimated at 585 million barrels and production forecasts of up to 100,000 barrels a day. Kenya even tested the discovery with an Early Oil Pilot Scheme in 2019, trucking 240,000 barrels to Mombasa for export. However, delays in financing, wrangling over tax and infrastructure terms, and Tullow’s own debt struggles meant the project never reached a final investment decision. Tullow’s exit ends its 14-year presence in Kenya, though the company will continue to benefit through royalty payments.
“The successful completion of this transaction marks a significant milestone for the company and the achievement of another one of our key 2025 strategic priorities,” said Ian Perks, Tullow’s chief executive officer.
