What Absa market index says about bourse

Kenya ranked eighth overall in the just released Absa Africa financial markets index (AFMI) 2022, an improvement from position 10 in 2021. However, Kenya lost some ground in the Pillar One of the index, scoring 43 out of a maximum score of 100, compared to a score of 46 in 2021.

Broadly, there are six pillars in the index. Pillar One evaluates the size and liquidity of domestic capital markets, along with the diversity of listed asset classes and the existence of standard features that enhance market depth. This low score speaks to two factors. First is liquidity, as measured by the turnover ratio. This essentially compares the volume of shares traded to the number of shares outstanding.