Kenyan market on an upward trend

The Kenyan equities market has shown remarkable resilience and growth in the face of economic challenges, with the NSE 25 and NSE 20 gaining 2.8 per cent and 1.9 per cent respectively, taking their year-to-date performance to 28.6 per cent and 27.7 per cent. Maurice Madiba, the founding director and CEO of Cloud Atlas Investing, joined CNBC Africa to discuss the positive performance of the market. Despite concerns surrounding the recent election, investors have remained optimistic about the East African market. The stability of the currency and equity markets post-election has bolstered confidence, leading to increased foreign participation in the market. With over 70% of market participation coming from foreign investors, there is a growing interest in the East African market due to its strong macroeconomic environment, low volatility, and high GDP growth rates. The use of technology, particularly mobile platforms, has also played a significant role in driving market confidence and participation. The Kenyan market's shift towards a service-based economy, coupled with advancements in technology like M-Pesa and potential future innovations like Masoka, is attracting foreign investment and boosting business sentiment. While the market has seen success in attracting foreign investors, there remains a challenge in engaging retail investors and small-time traders. Education and accessibility to technology are key factors that can help bridge this gap and promote wider market participation. The introduction of fixed income bonds accessible via mobile phones is a step towards making investment more convenient and inclusive. Additionally, the recent banking act law, which imposed restrictions on bank lending, has had mixed effects on the market, leading to some challenges for banking stocks but also creating opportunities for individuals with good credit records. Looking ahead, there are discussions about introducing a derivatives market in Kenya; however, the market may not yet be ready due to limited liquidity and active trading counters. The need for stronger domestic participation and increased market efficiency is crucial for stimulating cross-listed entities and improving market robustness. Despite these challenges, Maurice Madiba remains optimistic about the future of the Kenyan market and emphasizes the potential for growth and development.