NSE Reconfigures Two Key Market Indices

&title=NSE Reconfigures Two Key Market Indices” rel=”nofollow” alt=”telegram”> &name=NSE Reconfigures Two Key Market Indices” rel=”nofollow” alt=”tumblr”> NSE has reconstituted two key market indices Share &media=https://businesstoday.co.ke/wp-content/uploads/2026/08/NSE-CM.png” rel=”nofollow” alt=”pinterest”> &title=NSE Reconfigures Two Key Market Indices” rel=”nofollow” alt=”telegram”> &name=NSE Reconfigures Two Key Market Indices” rel=”nofollow” alt=”tumblr”> The NSE (Nairobi Securities Exchange) Plc has informed the investing public and market participants of changes to two of its market indices: the NSE Banking Index and the NSE Bond Index (NSE-BI).

The changes comprise the inclusion of Family Bank Limited in the NSE Banking Index following the fulfilment of the prescribed eligibility period, and the transition of the NSE Bond Index to a total return methodology to provide a more comprehensive measure of the performance of Kenya Government bonds.

The Banking Index is designed to measure the performance of the banking sector, using the shares of commercial banks listed on the bourse as its underlying securities.

Following its listing in March 2026, Family Bank Limited has become eligible for inclusion in the index upon completion of the six-month post-listing period prescribed under the index computation methodology.

Its inclusion brings the total number of constituent banks to twelve, comprising Family Bank Limited and eleven other listed commercial banks for which the NSE is the primary listing Exchange.

The reconstitution ensures that the index reflects the eligible listed banking sector and strengthens its role as a benchmark for measuring sector performance.

It also enhances the index’s potential to support the development of index-linked investment products, including Exchange-Traded Funds and other structured products.

The updated list of constituent banks includes: Absa Bank Kenya Plc, BK Group Plc, Diamond Trust Bank Kenya Limited, Equity Group Holdings Plc, Family Bank Limited, HF Group Plc, I&M Group Plc, KCB Group Plc, NCBA Group Plc, Stanbic Holdings Plc, Standard Chartered Bank Kenya Limited and The Co-operative Bank of Kenya Limited

The Nairobi bourse Bond Index was launched in September 2023 as a daily clean price index tracking benchmark Government bonds listed on the NSE.

Recognizing the importance of fixed income securities in the Kenyan capital market and following feedback from market stakeholders on the need for a more comprehensive measure of fixed income portfolio performance, the Nairobi bourse has reviewed the index’s computation methodology.

Under the revised methodology, each constituent bond will be valued using its dirty price, comprising the clean price plus accrued interest.

The index will therefore provide a more comprehensive measure of investment returns by reflecting both changes in bond prices and income earned from holding the bonds, rather than price movements alone.

The index will continue to track benchmark Government bonds across the 2-year, 5-year, 10-year, 15-year, 20-year and 25-year maturity segments issued by the Government of Kenya and listed on the NSE.

The transition brings the NSE Bond Index into closer alignment with international practices for sovereign bond indices and strengthens its relevance as a benchmark for investors, fund managers and issuers of bond-linked investment products.

It is part of the NSE’s broader efforts to deepen the fixed income market, enhance market transparency and support greater domestic and international investor participation.

Frank Lloyd Mwiti, Chief Executive Officer of the NSE Plc, said “Maintaining relevant and representative market indices is essential to strengthening transparency and supporting informed investment decisions. The inclusion of Family Bank Limited ensures that the NSE Banking Index remains an effective measure of performance in the listed banking sector. It also creates opportunities for the development of index-linked investment products, including exchange-traded funds, in line with our strategic ambition to list at least fifty diverse funds within the strategy period.

“Alongside these developments, we are undertaking key reforms to deepen our fixed income market. The transition of the NSE Bond Index to a total return methodology is an important first step in aligning our market benchmarks more closely with international standards. By capturing both price movements and income earned, the enhanced index will provide a more comprehensive performance measure and support our efforts to attract greater domestic and international investment flows into the fixed income market.”

Both changes take effect from November 2, 2026.

Jackson Okoth Writes for Business Today. He can be reached on email at [email protected]

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