Nairobi Securities Exchange Plc (NSE) has launched two new market indices that will calculate the mean of the top 10 best-performing counters by market capitalisation subject to review based on trading activities.

The two include NSE 10 Share Index (N10), which will track the performance of the equities markets, and NSE Bond Index (NSE-BI) meant for the bond market.

Potential issuers

The performance of the N10 index as part of the end-of-day reports by the Nairobi bourse started immediately yesterday, recording a 0.84 per cent decline to 991.64 from a base of 1,000 points on debut.

This new development follows extensive engagements with various stakeholders, including potential issuers of structured products like the Exchange Traded Funds (ETF). 

“The development of the new equity index, which will adopt a market capitalization float-adjusted methodology and the new Bond Index, will enhance our investors’ ability to effectively monitor the performance of listed securities on the NSE,” Geoffrey Odundo (pictured), the bourse’s CEO said.

Safaricom Plc, Equity Group, East African Breweries Limited (EABL), KCB, and Co-operative Bank, which are the top five companies on the exchange, controlling about 68 per cent of the current market’s total, have made it to the new N10 index.

The other five companies are Absa Bank Kenya, NCBA Group, Kenya Electricity Generating Company Plc (KenGen), Kenya Re-Insurance Corporation Ltd, and Centum Investment Co.

In line with best practices in respect of indices management, the NSE has also reviewed the current NSE 20 Share index.

As such, WPP Scan Group Plc, Nairobi Securities Exchange Plc, and Diamond Trust Bank Kenya have been replaced with CIC Insurance Group Plc, Bank of Kigali Group Plc and I&M Holdings Plc respectively, on the list of constituent companies. The NSE 20 share index requires the included companies to have at least 20 per cent of its shares quoted at the NSE and must have been continuously quoted for at least a year.