Uganda’s Parliamentary Pensions Scheme (PPS) is considering reducing its investments in Kenya due to macroeconomic challenges. The scheme’s total equity assets stand at UGX 24 billion, out of which two percent is in Kenya.
Although the pension scheme’s equity investments in Kenya represent a relatively small portion of its overall portfolio, the planned withdrawal signifies another instance of foreign investors withdrawing from Kenya’s equity markets.
In its most recent financials, the scheme reported a gross investment income UGX 55 billion and total assets of 425 billion. The growth in total assets marked a significant growth from UGX 349 billion in 2021/2022 to Shs. 425billion in 2022/2023.
According to the asset managers, the macroeconomic challenges in Kenya continue to dampen the stock market outlook despite positive earnings, attractive dividends and valuations.
“We…propose to reduce allocation on stocks listed on Nairobi Securities Exchange and selectively reallocate to stocks on the Uganda Securities Exchange with focus on companies with attractive dividend yields and valuations,” Esther Namirembe, an officer working with GenAfrica Assets Managers, told the scheme’s Annual General Meeting on 23rd Feb.
This ongoing pattern has seen foreign investors primarily driving outflows in recent times. In January 2024, foreign investors pulled out approximately $1.1 million from the Nairobi stock exchange.
However, there has been a notable interest in the bond market among investors, as evidenced by the Nairobi Securities Exchange reporting record-breaking turnover exceeding KES 170 billion within a single week in late February.
