The Nairobi Securities Exchange Plc (NSE) equity market has received a significant upgrade on its classification by the FTSE Russell Index Governance Board, transitioning from ‘Restricted’ to ‘Pass’. This move, announced in March 2024, follows a rigorous assessment of Kenya’s equity market against a set of technical criteria.
The reclassification signifies a crucial milestone for Kenya’s financial landscape, particularly in terms of investment and capital repatriation. Previously reported delays in the ability of institutional investors to repatriate capital from Kenya have been cleared, leading to the lifting of restrictions on implementing index changes for Kenyan securities within FTSE Russell equity indices, effective since September 2023.
Mr. David Wainaina, Acting Chief Executive of the NSE, expressed satisfaction with the reclassification, stating, “We are delighted by the reclassification which is a testament of the continued improvement in Kenya’s equity market and a demonstration of the confidence international institutional investors are placing in our market.”
The decision was informed by the findings of FTSE Russell’s external advisory committees and the FTSE Equity Country Classification Advisory Committee, composed of market practitioners with expertise in trading, custody, and investment management. Additionally, the assessment received support from the FTSE Russell Policy Advisory Board, representing the perspectives of leading global investors.
FTSE Russell’s flagship market cap-weighted equity indexes are widely used by investors globally to guide asset allocation decisions, portfolio construction, and risk analysis.
The Nairobi Securities Exchange (NSE) serves as a critical platform for local and international investors and issuers seeking exposure to Kenya’s and Africa’s economic growth. As a founding member of the African Securities Exchanges Association and the East African Securities Exchanges Association, NSE plays a pivotal role in mobilizing domestic resources and international capital, contributing to the nation’s economic development.
