The Nairobi Securities Exchange (NSE) has received a significant boost after the FTSE Russell Index upgraded its classification from "Restricted" to "Pass" in March 2024.

This move signifies a positive development for Kenya's equity market and increased confidence from international investors.

Previously, the FTSE Russell had flagged delays in institutional investors' ability to repatriate capital from Kenya, leading to restrictions on incorporating Kenyan securities into their equity indices.

However, the recent reassessment confirms that these issues have been addressed.

Consequently, the restrictions were lifted in September 2023, paving the way for smoother investment flows.

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FTSE Russell's classification process involves rigorous scrutiny by external advisory committees composed of market experts in trading, custody, and investment management.

Additionally, the FTSE Russell Policy Advisory Board, representing leading global investors, provides valuable insights into global equity market realities.

"We are delighted by the reclassification," said David Wainaina, Acting Chief Executive of the NSE.

"This is a testament to the continued improvement of Kenya's equity market and a demonstration of the confidence international institutional investors are placing in our market."

The FTSE Russell upgrade holds significant weight as their market cap-weighted equity indexes are widely used by global investors for critical investment decisions.

These indexes, including the FTSE Global Equity Index Series (FTSE GEIS), FTSE UK Index Series, and the Russell US Indexes, play a crucial role in asset allocation, portfolio construction, and risk analysis for investors worldwide.

The improved classification by FTSE Russell positions Kenya's equity market for greater visibility and potentially increased investment activity.