Kenya's stock exchange plans East Africa's

What happened

Kenya's Nairobi Securities Exchange is creating East Africa's first AI stocks-focused exchange-traded fund, which it plans to offer to investors before year-end, its CEO said. The Nairobi market attracts a sizeable proportion of foreign equity investors given its profitable ​banking sector and telecoms operator Safaricom, but it does not currently offer exposure to AI stocks.

Many African capital markets do not yet have AI ETFs, which are available in big developed markets such as ​the United States. Safaricom started offering stocks trading on its M-Pesa mobile phone payments platform ​in February. 95 billion). "My projection is we close the year at 5 trillion (shillings)," Mwiti said.

Why it matters

"We want essentially to be able to bring a product to our market where the underlying basket is a reflection of companies that have a direct exposure to AI," Frank Mwiti ‌told Reuters. "Instead ​of cement manufacturing... they want to do AI," he said.

The Nairobi bourse will study the ⁠global AI rally ‌carefully and delay the ETF launch if need be to ensure investors are not exposed ​to an overdone ​move, Mwiti said. "There is... ETFs are funds with underlying assets like listed shares, which trade on ​exchanges like ordinary equities, offering investors exposure to a particular asset class.

What to watch

The planned AI fund will most likely be denominated in the Kenyan shilling, Mwiti said, to limit foreign exchange risks. It is also considering a cryptocurrency ETF based on Bitcoin, Ethereum and Solana, which could be launched next year after the passage of a ‌law governing virtual assets in Kenya, he said.