Morgan Stanley Capital International (MSCI), an international firm that provides investment data and analytics services to investors, has promoted KCB Group to the MSCI frontier markets index, increasing the stock’s visibility to global investors.
MSCI latest changes show that KCB has been promoted from the small-cap index, joining Safaricom, Equity Group and East African Breweries in the constituents of the frontier markets index that captures large and mid-cap stocks across 28 frontier markets.
The changes will be effected on May 31, ushering it back to the index it had dropped from in November 2019 when MSCI downgraded it to the small-cap index.
The upgrade of KCB comes on the back of the stock having rallied by 46.35 percent since the start of the year, only beaten by Liberty Kenya whose share price has risen 51.22 percent in the same period.
The inclusion of KCB also comes after MSCI, which in August 2022 barred new Kenyan firms from joining its global stocks market platform over dollar shortages, mid-May this year lifted the suspension.
MSCI stated that market participants had indicated that liquidity in foreign exchange markets and the ability of foreign investors to repatriate capital from Kenyan equity markets had improved, necessitating the dropping of the freeze.
It is not clear the weight that KCB will be assigned in the MSCI Kenya index where Safaricom has been accounting for 51.1 percent, followed by Equity (32.1 percent) and EABL (16.81 percent). In the MSCI frontier markets small cap index, KCBs weight has been 3.4 percent, being the largest.
KCB is currently the fourth largest listed firm on Nairobi Securities Exchange (NSE) by market capitalisation, with its share having appreciated by 46.35 percent since January to take the valuation to Sh102.99 billion.
Safaricom closed Monday valued at Sh719.17 billion, retaining its spot as the most valuable firm on the NSE, followed by Equity (Sh173.97 billion and EABL (Sh126.52 billion).
MSCI periodic reviews on its indices are carried out quarterly every February, May, August and November, allowing for the introduction or removal of constituent companies and their weighting within the index.
The reviews give foreign investors an up-to-date picture of the state of the NSE, allowing them to make informed investment decisions.
The MSCI Kenya index which measures the performance of large and medium-sized firms, will be tracking the four bluer chips, exposing them to foreign investors who have often dominated trading on these counters.
The NSE market capitalisation has since the start of 2024 increased by over Sh300 billion. It opened Tuesday at Sh1.751 trillion.
