Kenyan equities are set for a wave of passive fund inflows after global index provider MSCI Inc. added CIC Insurance Group and Williamson Tea Kenya to its Frontier Markets Small Cap Index.
- •The additions, confirmed in MSCI’s semi-annual review published Wednesday and effective after the market close on November 24, mark a net gain for Kenya, which saw no deletions.
- •The decision forces funds tracking the benchmark to buy the two stocks, providing a fresh vote of confidence in the Nairobi Securities Exchange (NSE).
- •The methodology adjusts for investable free float, excluding strategic and tightly held positions.
Index Mechanics and Immediate Impact
The MSCI Frontier Markets Small Cap Index, which tracks 427 smaller companies across 28 developing economies, is the benchmark for an estimated $21.7 billion in investable assets.
The inclusions were driven by an expansion of the stocks' freely tradable shares and sustained trading activity, meeting MSCI's stringent size and liquidity filters. The index provider's methodology focuses on the investable free float, strategically excluding shares held by founding families or governments.
Recent performance (price returns, USD) shows a 1-year gain of 23.64% and a year-to-date return of 17.40%. The index trades at a trailing P/E of 13.40 and a price-to-book ratio of 0.98, with a dividend yield of 4.01%.
| Metric | Value |
|---|---|
| 1-Year Return | 23.64% |
| Year-to-Date Return | 17.40% |
| Dividend Yield | 4.01% |
| Price-to-Earnings (Trailing) | 13.40x |
| Price-to-Book | 0.98x |
| Constituents | 427 |
Vietnam accounts for 28.45% of the index weight, followed by Bangladesh at 14.11% and Pakistan at 10.32%. Kenya is part of the Other markets group.
Financials represent the largest sector component at 23.54%, followed by Industrials at 17.43% and Materials at 13.81%.
The Kenyan companies in the index are:
- •BAT Kenya
- •Bamburi Cement
- •Carbacid Investments
- •Centum Investment
- •CIC Insurance Group
- •Diamond Trust Bank Kenya
- •HF Group
- •Jubilee Holdings
- •KenGen
- •Kenya Power
- •Kenya Reinsurance
- •Williamson Tea Kenya
The steady additions across recent review cycles indicate improved liquidity conditions after the constrained trading period seen between 2021 and 2023.