The Morgan Stanley Capital International (MSCI), the premier global investment research firm, has promoted Co-operative Bank of Kenya (CO-OP) to the MSCI Frontier market Index (FM), and four other stocks to the MSCI Frontier Markets Small Cap Indexes, increasing the stocks visibility to global investors.
- •The Co-operative Bank of Kenya has been added to the Frontier market Index, to join Safaricom, KCB Group, Equity Group and East African Breweries.
- •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.
- •It also added 4 Kenyan companies – British American Tobacco (BAT), Diamond Trust Bank Kenya (DTB), Kenya Electricity Generating Company (KenGen) and Kenya Reinsurance Corporation (KENRE)-the MSCI Frontier Markets Small Cap Indexes
“The move will enable wider and deeper coverage of Kenya’s equity market increasing the visibility of companies listed on the NSE and enhance their attractiveness to global investors as the indices serve as benchmarks for institutional investors looking to gain exposure to frontier markets, Frank Mwiti, Chief Executive Officer of the NSE said.
Why it Matters
MSCI Inc 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 their weighting. In the recent review period, no Kenyan company has been removed or downgraded. Currently, Safaricom carries the most weight, accounting for 48.16 percent of the MSCI Kenya Index with Equity, KCB Group and EABL taking up 28.88, 17.29 and 5.67 percent respectively.
The upgrades, which follow the MSCI August 2024 review, come in the light of COOP gaining 10.1 percent, KenGen (14.4 per cent), DTB (0.1%) with BAT and Kenya Re shedding 15.28 percent and 36.2 percent respectively in the first 8 months of 2024.
“The inclusion is equally a reflection of the success of the structural market reforms that are positively impacting Kenya’s equity market making it efficient for global investors to invest in securities listed on the NSE in Kenya,” Mwiti added.
The Kenyan equities market has been bullish as signaled by the 10.6 percent year to date gain of the NSE All share Index (NASI) which closed the previous trading session at 101.95.
The Nairobi Securities exchange (NSE) market capitalization, which measures investor wealth, has been up since the beginning of 2024, increasing by KSh 154 billion to close at KSh 1.6trillion in the previous trading session.
