NAIROBI, Sept. 4 (Xinhua) -- The Nairobi Securities Exchange (NSE) on Monday launched two new indices in a bid to rejuvenate the market amid sustained foreign investors' flight.
NSE said in a statement released in the Kenyan capital of Nairobi that the market would now have the NSE 10 Share Index and the NSE Bond Index, two new indices that will help track the performance of the equities market and bonds market, respectively.
"The NSE 10 Index shall be based on a set of 10 companies, whose list will be reviewed semi-annually. One of the key elements of this index is that it will be based on market capitalization float-adjusted methodology and will be distributed on a daily basis," the NSE said.
Geoffrey Odundo, the NSE chief executive officer, said the new indices will enable investors to track market activities better.
"The development of the new equity index and the new bond index will enhance our investors' ability to effectively monitor the performance of listed securities on the NSE," he said.
Over the years, the NSE has had three main indices, namely the NSE 20 Share Index, NSE 25 Share Index, and NSE All Share Index.
The indices, however, have been on a decline due to "prevailing tough local and global economic conditions," according to the NSE.
Market capitalization, on the other hand, has declined 50 percent in two years to 10.3 billion U.S. dollars as shares of most blue chips declined due to the fleeing of foreign investors, who sold shares worth 205 million dollars in the first half of the year, against buys worth 99.8 million.
The new indices, in particular the NSE 10 Share Index, are therefore expected to reflect realities in the market. ■