The East African Securities Exchanges Association (EASEA) has launched a historic regional stock index the East Africa Exchanges (EAE) 20 Share Index marking a major step forward in the integration and development of capital markets across the region.
Unveiled by the Nairobi Securities Exchange (NSE), the new index aims to track the performance of 20 of East Africa’s top publicly listed companies, spanning Kenya, Tanzania, Uganda, and Rwanda. The EAE 20 Share Index is being hailed as a transformative tool to boost investor confidence, promote regional visibility of companies, and attract cross-border capital flows.
The East Africa Stock Index represents more than 85% of the region’s equity market capitalization and is the first index of its kind to aggregate the performance of companies across multiple East African exchanges.
Mr Frank Mwiti, CEO of the Nairobi Securities Exchange, described the index as a milestone in the evolution of East Africa’s financial markets.
“The introduction of the first regional index marks a significant milestone in the growth and deepening of East African capital markets and their economies,” said Mr Mwiti. “The EAE 20 Share Index is poised to enhance market transparency, attract both cross-border and international investment, and provide a dependable benchmark for tracking regional market performance.”
The move is expected to improve the efficiency of market operations, bolster investor confidence, and encourage collaboration among the region’s capital market players.
Mwiti added that the initiative supports the harmonization and integration of East African stock exchanges, laying the groundwork for the development of innovative financial instruments like exchange-traded funds (ETFs) and index-linked products.
The index is market capitalization-weighted and includes 20 of the most prominent blue-chip firms from key sectors such as banking, telecommunications, manufacturing, and consumer goods. To qualify, companies must be primarily listed on a participating exchange, maintain a minimum of one year’s continuous listing, and demonstrate consistent dividend payouts and strong profitability.
The companies featured in the EAE 20 Share Index include:
- Safaricom Plc
- KCB Group Plc
- Equity Group Holdings Plc
- The Co-operative Bank of Kenya Ltd
- Absa Bank Kenya Plc
- CRDB Bank Plc
- NMB Bank Plc
- Tanzania Breweries Ltd
- Tanga Cement Company Ltd
- Tanzania Cigarette Corporation
- Bralirwa Ltd
- BK Group Plc
- I&M Bank (Rwanda) Plc
- Cimerwa Plc
- MTN Rwandacell Plc
- MTN Uganda Ltd
- Stanbic Uganda Holdings
- Bank of Baroda (Uganda)
- Airtel Uganda Ltd
- Quality Chemical Industries Ltd
These firms, many of which already enjoy strong investor confidence in their respective domestic markets, are now expected to benefit from increased regional and international visibility.
The launch of the East Africa Stock Index underscores EASEA’s commitment to fostering regional integration and capital market development. EASEA is the umbrella body representing securities exchanges and depositories in East Africa, comprising:
- Nairobi Securities Exchange Plc (Kenya)
- Uganda Securities Exchange Plc
- Dar-es-Salaam Stock Exchange (Tanzania)
- Rwanda Stock Exchange
- Somali Stock Exchange
- Burundi Securities Exchange
- Ethiopia Securities Exchange
- National Securities Exchange of Somalia
- Central Depository and Settlement Corporation (Kenya)
The collaboration signals growing momentum towards a harmonized capital market ecosystem that will support regional economic development, innovation in financial instruments, and broader access to capital for companies.
The EAE 20 Share Index is designed to track share price movements and market capitalization changes among its constituents, offering a transparent benchmark for policymakers, analysts, and investors alike.
The initiative is expected to catalyse cross-listing and increase the liquidity of East African securities. It also opens the door for more sophisticated instruments such as ETFs and other derivatives based on the index.
While the index is a welcome development, challenges remain in harmonizing regulatory frameworks and infrastructure across East African markets. Market analysts suggest that for the index to reach its full potential, continued investment in technology, investor education, and policy coordination is essential.
Nonetheless, the optimism surrounding the East Africa Stock Index launch reflects a broader confidence in the region’s economic potential. With Africa’s financial markets becoming increasingly attractive to global investors, initiatives like the EAE 20 Share Index are well-positioned to play a pivotal role in shaping the continent’s capital market future.
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