Morgan Stanley Capital International (MSCI) has upgraded the Co-operative Bank of Kenya to the MSCI Frontier Market Index (FM) and added four other Kenyan stocks to the MSCI Frontier Markets Small Cap Indexes.
This move will enhance the visibility of these companies to global investors.
Co-operative Bank joins Safaricom, KCB Group, Equity Group, and East African Breweries in the Frontier Market Index. The changes will take effect on August 30, 2024, and will also apply to the MSCI All-Country World Index.
The four Kenyan companies added to the MSCI Frontier Markets Small Cap Indexes are British American Tobacco, Diamond Trust Bank Kenya, Kenya Electricity Generating Company, and Kenya Reinsurance Corporation.
MSCI periodically reviews its constituents in February, May, August, and November, adding or removing companies based on various factors. In the recent review, no Kenyan company was removed or downgraded.
The upgrades follow a period of strong performance for several Kenyan stocks. Co-operative Bank gained 10.1%, KenGen increased by 14.4%, and Diamond Trust Bank rose 0.1%. However, British American Tobacco and Kenya Reinsurance Corporation experienced declines of 15.28% and 36.2%, respectively.
Safaricom currently holds the largest weight in the MSCI Kenya Index, accounting for 48.16%. Equity, KCB Group, and East African Breweries follow with weights of 28.88%, 17.29%, and 5.67%, respectively.
Mwiti emphasized that the inclusion of Kenyan companies in MSCI indices reflects the positive impact of structural market reforms on the efficiency and attractiveness of the Kenyan equity market to global investors.
The Kenyan equities market has been bullish, with the NSE All Share Index (NASI) gaining 10.6% year-to-date and closing at 101.95 in the previous trading session. The market capitalization has increased by KSh 154 billion to KSh 1.6 trillion since the beginning of 2024.