Big boost as Blackrock chooses to invest in Nairobi Stock exchange
The world’s largest asset management firm, BlackRock, has made a significant investment in the Nairobi Securities Exchange (NSE) after a four-year hiatus, marking a win for the Kenyan bourse as it emerges from its toughest year yet.
Kamau Thugge, the Central Bank of Kenya (CBK) governor, shared in a recent meeting with bankers that he had met with representatives from BlackRock, a multinational with assets worth $9.1 trillion. They expressed interest in Kenya as one of the ten economies they’ve chosen to invest in.
Dr. Thugge mentioned, “I recently met with BlackRock Asset Managers. They inquired about the state of our economy and mentioned their return to Africa after four years, focusing on 10 selected countries for investment.”
BlackRock’s investment in equities has contributed to a positive trend in the stock market, as evident from the recent increase in equities turnover at the NSE.
This upsurge in equities activity coincides with a mini-rally, pushing the NSE’s year-to-date returns to 16.8% as of last Friday.
Dr. Thugge attributes BlackRock’s interest in Kenya to developments in the foreign exchange market, including the shilling’s 16% gain against the US dollar since the beginning of 2024, partly due to financial activities like the issuance of a $1.5 billion Eurobond.
The Central Bank notes a surge in foreign exchange transactions within the interbank market, rising from 7% to 32%. This shift is credited with boosting the local currency against major global currencies.
The Central Bank’s efforts to enhance the interbank foreign exchange market have been significant, including lowering the minimum trade amount to $100,000 and launching the Electronic Matching Systems (EMS) platform.
Dr. Thugge highlighted discussions with bank treasurers regarding these reforms and the progress made in increasing interbank market transactions to 32%, surpassing the initial target of 25%.
The CBK’s strategic plan, “the journey to 25,” aims to revitalize the interbank foreign exchange market by increasing its share of transactions.
Dr. Thugge emphasized the removal of restrictions and the merging of parallel markets as crucial steps in improving the interbank foreign exchange market, signaling positive changes for Kenya’s financial sector.
