NSE 20 Share Index

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The NSE 20-Share Index (NSE 20) is the long-standing benchmark index used for equities traded on Kenya's Nairobi Stock Exchange (NSE) and represents the geometric mean of share prices of the NSE's 20 top stocks. It has recently been joined by the more broad-based NSE All Share Index (NASI), aimed at capturing the market capitalization of all the NSE's listed equities traded in a day. The NSE 20 lost more than one-third of its value in 2008 as Kenyan investors began fleeing stocks after brokerage collapses and the global credit crisis.

History

The NSE 20-Share Index was introduced in 1964, one year after African natives were first allowed to trade on the NSE. It was joined in February 2006 by the NSE All Share Index (NASI), aimed at reflecting the total market value of all stocks traded on the NSE in one day[1] rather than just the price changes of the 20 best performers captured by the NSE 20.

The NSE 20 took a beating in 2008, closing out the year at 3,521.18 compard to 2007's end-of-year closing at 5,444.83, which followed an all-time high in January 2007 of 6,161.47.[2] The index took hit on several fronts in 2008, beginning with economic paralysis from a post-election standoff in the first two months followed by the collapse of Nyaga Stockbrokers and then the global financial collapse in the third and fourth quarters. However, several equity analysts predict the NSE 20 to rise above 4,000 by year-end 2009.

NSE 20 Components

The 20 listed companies below are components of the NSE 20-Share Index as of June 26, 2008. On that date the NSE announced that Equity Bank had replaced Diamond Trust Bank in the Finance and Investment Sector, East African Cables had replaced Sameer Limited and Athi River Mining had replaced Total Kenya in the Industrial and Allied Sector, and Safaricom Ltd. had replaced TPS Serena in the Commercial and Services Sector.[3]

1. ICDC Investment Company 2. Kenya Electricity Generating Company 3. Mumias Sugar Company 4. Rea Vipingo Plantations Ltd. 5. CMC Holdings 6. Express Ltd. 7. Nation Media Group 8. Sasini Ltd. 9. Kenya Airways 10. Safaricom Ltd. 11. Barclays Bank (K) Ltd. 12. Equity Bank 13. Kenya Commercial Bank 14. Standard Chartered Bank (K) Ltd. 15. Bamburi Cement Ltd. 16. British American Tobacco Ltd. 17. East African Breweries Ltd. 18. East African Cables 19. Kenya Power & Lighting Company 20. Athi River Mining

Safaricom was granted an exception to the rule restricting inclusion into the NSE 20 to stocks that have traded for at least one year after the company held its IPO in early 2008.

References

  1. About NSE. NSE.
  2. Kenyan stocks fall 35 pct in 2008, seen rising. Reuters.
  3. Press Release: Changes to the NSE 20-Share Index and All Share Index (NASI). NSE.