Kenya’s NSE CEO bullish as capital markets rally after impressive H1

Kenya’s securities exchange, the Nairobi Securities Exchange (NSE), has experienced a remarkable performance in the first half of 2024, with the All Share Index surging by 19 per cent, driven by growing investor confidence in the country’s capital markets. In an exclusive interview with CNBC Africa, Frank Mwiti, the new CEO of the Nairobi Securities Exchange, shared his vision for the exchange and outlined key areas for driving up listings and local investor participation. Mwiti highlighted three key factors contributing to the exchange's success: the impressive performance of listed entities, favorable government policies encouraging foreign direct investment, and strong capital allocation to equity counters by pension funds and fund managers, particularly in financial services, telecoms, and manufacturing sectors. The bond market at the Nairobi Exchange has also seen phenomenal trading activity, with trading volumes experiencing a 155% increase in the first half of 2024 compared to the previous year. Mwiti attributed this success to the attractive interest rates on government treasury bonds and infrastructure bonds, as well as tax incentives associated with infrastructure bonds. With the government issuing high-yield government paper, the bonds market is expected to maintain its robust performance. As the new CEO of NSE, Mwiti outlined his strategic vision for the exchange, focusing on the expansion of product offerings, increasing retail investor participation, and introducing structured products like exchange-traded funds (ETFs) and derivatives. He emphasized the importance of new listings, including privatizations from the public sector, exits of portfolio companies by private equity firms, and family-owned businesses seeking listing opportunities. Mwiti also highlighted the need to enhance retail investor education and promote unit trusts and mutual funds to attract more retail participation in the market. Under his leadership, the NSE aims to embrace technology through advanced data analytics and AI to enhance the exchange's offerings in collaboration with regulators and other stakeholders. Mwiti's strategic vision aims to drive further growth and deepen the capital markets in Kenya, positioning the Nairobi Securities Exchange as a hub for local and international investors.