The Nairobi Securities Exchange (NSE) has announced the addition of three Kenyan companies in the Morgan Stanley Capital International (MSCI) Frontier Markets Small Cap Index, a move that is expected to boost the visibility of Kenyan stocks to international investors and potentially drive substantial capital inflows to the NSE.
Kenya Power and Lighting Company PLC, Carbacid Investments PLC, and Bamburi Cement PLC will be the three to join the MSCI small cap index. The index already includes Kenya’s BAT Kenya PLC, Diamond Trust Bank Kenya, KenGen, and Kenya Re. With the number of Kenyan firms listed on index now at seven, the country’s position in the global investment landscape continues to see improvement.
According to Frank Mwiti, NSE’s Chief Executive Officer, the addition confirms that the MSCI recognizes the immense growth potential in Kenya’s listed equities.
“This increased representation will provide the global investment community with greater exposure to Kenya’s listed companies and drive substantial capital inflows to the NSE,” he said.
The index, which is a critical tool for global investors, capturing small cap representation across 28 frontier market countries, is particularly important as it often outperforms the larger main frontier index. For the newly added companies, this inclusion brings numerous benefits, such as increased visibility among international investors.
This development comes on the heels of another recent milestone for the NSE, whereby five other Kenyan companies were added to the Frontier Markets Index, including Co-operative Bank of Kenya, British American Tobacco (BAT) Kenya, Diamond Trust Bank, Kenya Electricity Generating Company (KenGen), and Kenya Reinsurance Corporation.
With the appeal of Kenyan securities expected to rise, the increased global visibility might lead to more diverse investment inflows, potentially improving liquidity in the market and offering local companies better access to capital for expansion and innovation.
This sets the stage for transformative economic growth and development in the years to come.
