FTSE Group and the Nairobi Securities Exchange (NSE) have announced the launch of the FTSE NSE Kenyan Shilling Government Bond Index, the world’s first independently calculated benchmark tracking the principal Kenyan government bond market.
The FTSE NSE Kenyan Shilling Government Bond Index measures the performance of Kenyan sovereign debt.
The FTSE NSE Kenyan Shilling Government Bond Index is designed to provide investors with an accurate metric to measure the performance of Kenyan sovereign debt.
The index, calculated on both a capital and total return basis, includes KES-denominated bullet bonds, zero-coupon bonds and strippable bonds with a minimum notional of KES 5 Billion. Sub indices are also calculated for a range of maturities.
Designed to be suitable for use as a performance benchmark, the new index will play an important role in the development of capital markets and corporate governance in East Africa. Also suitable as a basis for the creation of financial products, such as mutual funds and ETFs, the new indices enhance market access, contributing to the further growth and visibility of African debt markets.
The index complements the FTSE NSE Kenya Equity Index Series that was launched in November 2011.
Jonathan Cooper, Managing Director, FTSE Middle East and Africa, said: “The launch of the FTSE NSE Kenyan Shilling Government Bond Index Series, is the culmination of several months consultation involving both the Nairobi Securities Exchange and various market participants. The index offers innovative investment opportunities in the local fixed income market and provides the Kenyan debt market with increased international visibility.”
Peter Mwangi, Chief Executive, Nairobi Securities Exchange, said: “In line with our vision ‘To be a leading securities exchange in Africa, with a global reach’, the NSE endeavours to innovate various products that satisfy the market needs. Our partnership with FTSE – a world-leader in the provision of global index and analytical solutions – illustrates our commitment to enrich this market.”
As yet, investors are unable to gain targeted access to Kenyan financial markets via ETFs, whether it be equity or fixed income. However, investors can gain broad equity access to Africa, which includes some exposure to Kenya, via the following funds: DB X-tracker MSCI EFM Africa Top 50 Index ETF (LON: XMAF), Market Vectors Africa Index ETF (NYSE: AFK) and RBS MSCI Emerging and Frontier Markets Africa ex South Africa ETF (XETRA: M9SZ).