US drops more Kenyan companies listed in NSE over unattractiveness
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US firm drops Kenya companies listed in Nairobi Securities Exchange (NSE), a second time in three months
US firm drops Kenya companies listed in Nairobi Securities Exchange (NSE), a second time in three months.
Kenya’s stock market faces more investment hurdles after Morgan Stanley Capital International (MSCI) dropped its listed firms from the latest MSCI Equity Index for frontier markets, signaling the increasing unattractiveness of the Kenyan economy to foreign investment.
For the second time in three months, the American investment advisory firm removed companies listed on the Nairobi Securities Exchange (NSE) from its key index.
This is as Kenya’s investment environment is becoming worse due to the country’s unpredictable tax system, a lack of dollars, a declining value of the US dollar, and high fuel prices, all of which drive up living expenses.
The index influences the investment decisions of foreign investors in emerging and frontier markets.
Kenya has been lumped together with Bangladesh, Egypt, and Nigeria whose stocks have been blacklisted by the New-York based advisory firm.
“In light of currently observed market accessibility issues, MSCI will not implement changes as part of this Index Review for any securities classified in Bangladesh, Egypt, Kenya, or Nigeria for the MSCI Bangladesh, MSCI Egypt, MSCI Kenya, and MSCI Nigeria Indexes or impacted composite indexes,” MSCI said in a statement dated November 14.
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However, firms on the Sri Lankan stock market have been reinstated in the MSCI Equity index following improvements in the trading environment.
“… liquidity in the Sri Lankan foreign exchange market has improved and no longer impacts the ability of foreign investors to repatriate capital from the Sri Lankan equity market, MSCI will resume the implementation of index review changes,” said MSCI.
In June this year, MSCI dropped Kenyan-listed NSE companies together with those in Nigeria, Egypt, Sri Lanka, and Bangladesh from its quarterly index reviews over poor investment climate.
MSCI evaluates equity markets around the world each year to determine whether they should be classified as a developed, emerging, and frontier or standalone market.
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