Five Kenyan companies have been added to the Morgan Stanley Capital International (MSCI) Frontier Markets Index.
The Nairobi Securities Exchange (NSE) CEO, Frank Mwiti in a statement said the inclusion of these companies underscores the resilience and growth potential of Kenya’s capital markets and will enable wider and deeper coverage of Kenya’s listed equities market.
“Exciting News for Kenya’s bullish equities market as 5 listed firms join key global indices. I’m thrilled to share that MSCI Inc. has upgraded an additional 5 companies listed on the Nairobi Securities Exchange PLC to its Frontier Markets Indices,” he said.
Co-operative Bank of Kenya has been promoted from the small-cap index, joining Safaricom PLC, KCB Bank Group, Equity Bank Limited, and East African Breweries PLC (EABL).
Companies Upgraded
Additionally, British American Tobacco (BAT) Kenya, Diamond Trust Bank, Kenya Electricity Generating Company (KenGen), and Kenya Reinsurance Corporation have been included in the MSCI Frontier Markets Small Cap Indexes.
The changes, the MSCI said in a note, will take place as of close of 30th August 2024 and will also apply to the MSCI All Country World Index.
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Mwiti further stated that the addition will increase the visibility of companies listed on the Nairobi Securities Exchange PLC and enhance their attractiveness to global investors.
He noted that the MSCI indices serve as benchmarks for institutional investors seeking exposure to frontier markets.
About MSCI
MSCI is a leading provider of critical decision support tools and services for the global investment community.
It’s also an international firm that provides investment data and analytics services to investors,
Its most well-known indices include the Frontier Markets Index, Emerging Markets Index, and All Country World Index.
Also to note, Kenya is part of the Frontier Markets Index, which features 213 companies from 28 countries.
Currently, Safaricom carries the most weight in the MSCI Kenya Index, accounting for 48.16 percent, with Equity Bank at 28.88 percent, KCB Group at 17.29 percent, and EABL at 5.67 percent.
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Why The Companies were Added to Key Stock Market Indices
The recent upgrades, following the MSCI August 2024 review, come amid varying performances: Cooperative Bank gained 10.1 percent, KenGen increased by 14.4 percent, and Diamond Trust Bank saw a slight rise of 0.1 percent.
In contrast, British American Tobacco and Kenya Reinsurance Corporation experienced declines of 15.28 percent and 36.2 percent, respectively, in the first eight months of 2024.
MSCI periodic reviews on its indices are carried out quarterly every February, May, August and November, allowing for the introduction or removal of constituent companies and their weighting within the index.
Furthermore, the reviews give foreign investors an up-to-date picture of the state of the NSE, allowing them to make informed investment decisions.
The MSCI Kenya index which measures the performance of large and medium-sized firms, will be tracking the four bluer chips, exposing them to foreign investors who have often dominated trading on these counters.
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