In a strategic move to diversify its investment portfolio, Mark Mobius through his company, Mobius Capital Partners, a renowned asset manager, has announced its latest investment in the Nairobi Securities Exchange, the world’s smallest stock market. This marks another milestone for the company as it expands its presence in emerging markets across the globe.
While India remains a favored market for Mark Mobius, the veteran investor’s attention has recently shifted towards the relatively smaller Kenyan market. This change in focus is primarily due to the significant decline in Kenyan stocks witnessed over the past two years.
Alongside Kenya, Mobius Capital Partners has made significant investments in the exchange markets of South Africa, Brazil, Turkey, and Vietnam. However, the company’s largest holdings remain concentrated in the robust economies of Taiwan, South Korea, and India.
With this recent investment, Mobius Capital Partners demonstrates its confidence in the growth potential of Kenya’s financial market and its commitment to supporting the country’s economic development. By investing in the Nairobi Securities Exchange, the asset manager seeks to tap into the opportunities presented by Africa’s vibrant and rapidly expanding economy.
Kenya, with a modest market capitalisation of only $10.72 billion, finds itself at the bottom of the ladder, ranking 66th among global equity markets. In contrast to India, Kenya’s stock exchange is home to just 61 listed companies. Notably, Safaricom PLC, a telecommunications services provider, holds the largest market capitalisation in the country, valued at $4.24 billion, as reported by Bloomberg’s data.
At the Greenwich Economic Forum in Hong Kong, Mark Mobius, the founder of Mobius Capital Partners, stated that their primary investments are focused on Taiwan, Korea, and India. However, they are also actively investing in Kenya, South Africa, Brazil, Turkey, and Vietnam.
This statement comes amidst the Nairobi Securities Exchange (NSE) All Share Index experiencing a decline of 21.3 percent year-to-date, following a similar drop observed last year.
In 2022, Kenya experienced a deceleration in its real GDP growth, dropping to 5.5 percent compared to the previous year’s 7.5 percent. This decline was primarily influenced by the global repercussions stemming from Russia’s invasion of Ukraine, which had a significant impact on commodity prices and severely affected Kenya’s economy. Additionally, the country faced the challenge of drought, which negatively impacted its crucial agriculture sector.
Despite these setbacks, Kenya made commendable progress in addressing its fiscal deficit. Through enhanced revenue collection efforts and a commitment to following the fiscal consolidation path supported by the International Monetary Fund, the country managed to narrow its fiscal deficit from 8.2 percent of GDP in 2021 to 6.3 percent in 2022. This achievement demonstrates Kenya’s dedication to improving its economic stability and fiscal health.
During an interview with CNBC-TV18 in February of this year, Mobius emphasized that emerging markets (EMs), including India, are performing admirably and are benefiting from the availability of affordable energy from Russia. However, Mobius also expressed concern regarding the substantial risk posed by China’s potential attempt to annex Taiwan.
India, as the fifth largest equity market globally, holds approximately 3.23 percent of the total world equity market, which amounts to $106.4 trillion as of Thursday. Alongside India, two other favored investment destinations according to Mobius, namely Taiwan and Korea, contribute an additional 1.8 percent each to the global equity market.
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