(Nairobi) – Morgan Stanley Capital International (MSCI) has added Kenya Power, Bamburi Cement, and Carbacid Investments to its Frontier Markets Small Cap Index, increasing their exposure to global investors. This addition enhances the visibility of Kenyan firms on the global stage, opening up potential capital inflows into the Nairobi Securities Exchange (NSE).
This recent inclusion brings the total number of Kenyan companies on the MSCI Frontier Markets Small Cap Index to seven. All of these firms are listed on the Nairobi Securities Exchange (NSE), which continues to attract attention from international investors exploring opportunities in frontier markets. The index now includes Kenyan companies such as British American Tobacco (BAT), KenGen, Diamond Trust Bank Kenya, Kenya Reinsurance Corporation, Kenya Power, Carbacid Investments, and Bamburi Cement.
According to MSCI, these changes will officially take effect after the market closes on November 25. Notably, MSCI confirmed that no Kenyan companies have been removed from the index in this review period.
Frank Mwiti, CEO of Nairobi Securities Exchange PLC, expressed optimism about the benefits of this inclusion, stating, “The addition of three more companies to the MSCI Frontier Markets Small Cap Index underscores the recognition by MSCI of the huge potential growth of Kenya’s listed equities. This increased representation will offer the global investment community greater exposure to Kenya’s listed companies and drive significant capital inflows to NSE.”
The recent upgrade of these companies into the MSCI index follows strong performances in their share prices, as all three have seen significant capital gains this year.
| Company | Current Share Price | Year-to-Date Growth | Highlights |
|---|---|---|---|
| Bamburi Cement | KSh 66.00 | +84.1% | 35.9% dividend yield from Ugandan unit sale, competing acquisition offers. |
| Kenya Power & Lighting | KSh 4.76 | +235.2% | Return to profitability, foreign exchange gains driving profit. |
| Carbacid Investments | KSh 19.95 | +33% | Recent acquisition attempt of BOC Kenya. |
Bamburi Cement’s current price is KSh 66.00, showing a robust 84.1% increase year-to-date. This growth is largely driven by a 35.9% dividend yield following the sale of its Ugandan unit and two competing acquisition offers for a majority stake, which boosted its share price by over 100% at one point this year.
Kenya Power & Lighting has experienced an even more remarkable rise, with a 235.2% increase year-to-date. Its stock, currently valued at KSh 4.76, remains below its book value of KSh 44.74. The company recently returned to profitability, with profits growing tenfold due to favorable foreign exchange gains.
Carbacid Investments, up 33% since January, is trading at KSh 19.95. The company has shown modest profit growth according to its latest financials and is considering the acquisition of BOC Kenya, a listed gas company, which is currently under internal review.
These recent gains at the NSE have helped the exchange recover from losses sustained in 2023. The NSE All Share Index reflects this improvement, with a 24.9% gain year-to-date, currently standing at 115.06 points.
The MSCI Frontier Markets Small Cap Index, which is one of MSCI’s key indices, helps global investors identify promising stocks in developing economies. MSCI provides other major indices, such as the Emerging Markets Index and the All Country World Index, which support investment decisions worldwide. Kenya is part of the MSCI Frontier Markets Index, which includes 213 companies from 28 countries.
MSCI’s index restructuring occurs four times a year—in February, May, August, and November—when companies may be added, removed, or have their weight adjusted within the index. In this most recent restructuring, no Kenyan companies were removed or downgraded, signaling confidence in their market performance.
Currently, Safaricom carries the most weight in the MSCI Kenya Index at 41.5%. Other significant Kenyan firms include Equity Group (29.4%), KCB Group (17.8%), Co-operative Bank of Kenya (5.9%), and East African Breweries Limited (EABL) (5.4%). These weights reflect the importance of these firms to Kenya’s market representation on the global stage.