The Nairobi Securities Exchange (NSE) received a significant upgrade from the FTSE Russell Index Governance Board.
This move is expected to attract more foreign investment, improve market liquidity, and increase the visibility of Kenyan companies globally.
What the Upgrade Means
The reclassification, implemented in March 2024, simplifies the process for foreign investors to withdraw their money from Kenya.
It also makes the market more attractive by reducing a previous barrier.
The lifting of restrictions on Kenyan securities within the FTSE Russell Index’s equity indices will make these companies more visible to a global audience of potential investors.
FTSE Russell’s market cap-weighted equity indexes are widely used for investment decisions worldwide.
Including the NSE in these indexes opens up more investment opportunities for Kenyan companies.
David Wainaina, acting CEO of the Nairobi bourse, sees the upgrade as a recognition of Kenya’s improving equity market and a sign of growing confidence from international investors.
“We are delighted…a testament to the continued improvement…and a demonstration of the confidence international institutional investors are placing in our market.”
Reasons for the Upgrade
FTSE Russell’s evaluation identified positive changes in the Kenyan market that previously hindered investor confidence.
These improvements, implemented in September 2023, included a simplified withdrawal process. The introduction of day trading in 2021 eased market liquidity.
In addition, the Environmental, Social, and Governance (ESG) reporting promotes transparency and best practices.
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