Kenya’s Capital Markets Authority has approved the listing of an exchange-traded fund tracking 11 banking stocks on the Nairobi Securities Exchange, giving investors a way to gain exposure to the country’s banking sector through a single product.
The WSA Banking Index ETF, issued by Wallstreet Africa Group in partnership with Tradiam Asset Managers, will track the NSE Banking Index, the regulator said today.
The CMA said the approval makes the fund the first locally domiciled ETF to be listed on the NSE.
“As part of its strategy to diversify and deepen the capital markets, the Capital Markets Authority (CMA) has approved the listing of an innovative Index Exchange Traded Fund (ETF), WSA Banking Index ETF, on the Nairobi Securities Exchange (NSE). The CMA Board granted approval to list the Exchange Traded Fund on the NSE in line with the Capital Markets Policy Guidance Note on Exchange Traded Funds, 2015. This brings to three the number of ETFs listed on NSE,” the CMA said.
The index comprises Equity Group Holdings, KCB Group, Co-operative Bank of Kenya, Absa Bank Kenya, NCBA Group, Standard Chartered Bank Kenya, Stanbic Holdings, I&M Group, Diamond Trust Bank, HF Group and Rwanda’s BK Group, according to the announcement.
CMA Chief Executive Wyckliffe Shamiah said the ETF would expand investment options and support efforts to develop Kenya’s capital markets.
“The rollout of the innovative ETF product by the Wallstreet Africa Group is aligned to the Authority’s ambition of facilitating curation of innovative products in the capital markets space,” he said.
The fund will be structured as an open-ended scheme, with its units traded on the NSE. Its value will fluctuate with the performance of the underlying banking stocks.
The ETF will be denominated in Kenyan shillings and its underlying shares are traded in the same currency, meaning investors will not face foreign exchange exposure from the fund’s underlying investments, the CMA said.
Investors will nevertheless face risks from equity-market volatility, interest-rate movements, the performance of constituent banks, regulatory changes and broader economic conditions.
The ETF will join the Absa NewGold ETF, which tracks gold prices, and the Satrix MSCI World Feeder ETF, which tracks large and mid-cap companies in developed markets.
An ETF is an investment fund that tracks an index or other underlying asset and trades on a stock exchange like an ordinary share. Investors will be able to buy and sell units through stockbrokers or other authorised market intermediaries once trading begins.
The WSA Banking Index ETF is intended to provide diversification by giving investors exposure to multiple banking stocks through a single security.
The CMA said the new product is part of broader efforts to diversify investment products and deepen Kenya’s capital markets.
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Faustine Ngila is the AI Editor at Impact Newswire, based in Nairobi, Kenya. He is an award-winning journalist specializing in artificial intelligence, blockchain, and emerging technologies.
He previously worked as a global technology reporter at Quartz in New York and Digital Frontier in London, where he covered innovation, startups, and the global digital economy.
With years of experience reporting on cutting-edge technologies, Faustine focuses on AI developments, industry trends, and the impact of technology on society.
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