NSE adds two indices as it diversifies product offerings

By James Anyanzwa

Investors at the Nairobi Securities Exchange (NSE) have yet another opportunity to gauge the performance of their investment after the bourse launched two additional stock indices.

The FTSE NSE Kenya Index Series, which went live on Tuesday, comprises the FTSE NSE Kenya 25 Index, and FTSE NSE Kenya 15 Index.

The new indices are expected provide a basis for the development of new financial products for the 57-year-old exchange, and create international visibility for the local market.

The NSE also hopes the new indices will attract additional capital flows into the domestic market and enhance liquidity and market capitalisation.

The latest move is part of the NSE’s efforts to evolve into a full service securities exchange which supports trading, clearing and settlement of equities, debt derivatives, and other associated instruments.

FTSE NSE Kenya 25 Index will measure the performance of the 25 most liquid stocks trading on the NSE, while the FTSE NSE Kenya 15 Index reflects the performance of the largest 15 stocks ranked by full market capitalisation. The two indices will run concurrently with the NSE 20-Share and NSE All Share Indices.

a milestone

"The launch of these new indices is a milestone for the NSE. They reflect the growing interest in new domestic investment and diversification opportunities in Kenya," said Peter Mwangi, CEO of NSE

The indices have been developed through a partnership between NSE and the FTSE International, an award winning global leader in the creation and management of index solutions.

The FTSE NSE Kenya Series is designed to represent the performance of the companies listed on the NSE. The series provides investors with a comprehensive and complementary set of indices with which to measure the performance of the major capital and industry segments of the stock market. " Our partnership with FTSE International illustrates our commitment to meeting the evolving needs of our domestic and international investors," said Mwangi.

low risk

He was speaking during an event to mark the launch of the two indices at the NSE trading floor in Nairobi on Tuesday.

" FTSE has been committed to working with African markets for close to a decade," said Donald Keith, Deputy chief executive, FTSE International, adding that, "Kenya remains at low risk of external debt distress".