Morgan Stanley Capital International (MSCI) has added Bamburi Cement, Kenya Power and Carbacid Investments to the Frontier Markets Small Cap Index, increasing the companies’ visibility to global investors.
- The addition brings the total number of companies in the index to 7 – all listed at the Nairobi Securities Exchange (NSE) – boosting the bourse’s reach to investors looking for opportunities in Frontier markets.
- Kenyan companies incorporated in the index now include BAT, KenGen, Diamond Trust Bank Kenya, Kenya Reinsurance Corporation, Kenya Power and Lighting, Carbacid Investments and Bamburi Cement.
- The changes will take place after the markets close on 25th November, MSCI said, adding that no Kenyan company has been removed from the MSCI Index in November.
“The addition of three more companies to the MSCI Frontier Markets Small Cap Index underscores the recognition by MSCI of the huge potential growth of Kenya’s listed equities. This increased representation will offer the global investment community greater exposure to Kenya’s listed companies and drive significant capital inflows to NSE,” Frank Mwiti, Chief Executive Officer, Nairobi Securities Exchange PLC noted.
The upgrade comes in light of all the 3 companies counting massive capital gains in the recent months, all underpinned by strong fundamentals.
Bamburi Cement now trades at KSh 66.00, an impressive 84.1% year-to-date. The company has a 35.9% dividend yield owing to the special dividend derived from the sale of the Ugandan unit this year. However, the company received two competing offers seeking to acquire a majority stake of Bamburi, which sent the share price higher above the 100% gain from the beginning of the year.
Kenya Power & Lighting had its share price surge 235.2% year-to-date, currently trading at KSh 4.76, still below its book value of KSh 44.74. The company bounced back to profitability in the full year 2024 results, with profits growing 10 fold owing to foreign exchange gains.
Carbacid Investments, 33% up since January, is currently trading at KSh 19.95 with mild profit increases according to recent financials. The company is looking to acquire fellow listed gas company BOC Kenya currently under internal review.
Similarly, the NSE has recovered from 2023 losses, rebounding to a 24.9% year to date gain as signaled by the NSE All share Index which currently trades at 115.06 points.
MSCI provides indices and other decision making tools for the global investment community. Its most well known indices are the Frontier Markets Index, Emerging Markets Index, and All Country World Index. Kenya is one of the countries in its Frontier Markets Index, which includes 213 companies from 28 countries.
MSCI restructures its constituents periodically – February, May, August and November – adding or removing any constituent companies and adjusting their weighting.
In the recent review period, no Kenyan company has been removed or downgraded. Currently, Safaricom carries the most weight, accounting for 41.5% of the MSCI Kenya Index with Equity, KCB Group Co-op Bank and EABL taking up 29.4%, 17.8%, 5.9% and 5.4% percent respectively.
