NSE to launch East Africa’s first AI-focused ETF before end of 2026

The Nairobi Securities Exchange (NSE) is set to launch East Africa's inaugural AI-focused exchange-traded fund (ETF) before the end of 2026, as it seeks to expand investment options within Kenya's capital market. According to NSE CEO Frank Mwiti, the exchange is developing the product to grant local investors access to companies at the vanguard of the global artificial intelligence industry.

The proposed ETF will monitor a portfolio of entities with substantial involvement in artificial intelligence, enabling investors to gain exposure to the sector via a single exchange-traded product rather than buying individual foreign technology stocks. Mwiti explained, "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."

This initiative aligns with the ongoing surge of global investment in artificial intelligence, as companies involved in semiconductors, cloud computing, data infrastructure, and generative AI garner strong investor interest. For Kenyan investors, the ETF could offer a relatively accessible means of gaining exposure to the swiftly expanding technology sector, particularly as direct foreign investment remains less prevalent locally.

The NSE is actively working to diversify its product line as it strives to deepen trading activity, attract additional retail investors, and boost participation from institutional investors. Currently, the NSE provides a variety of investment products, such as equities, bonds, and derivatives, but has minimal exposure to global technology themes.

Consequently, an AI-focused ETF would introduce a novel investment category to the Kenyan market, allowing investors to indirectly participate in the performance of a composite of global companies. Mwiti anticipates that the recent surge in Kenyan equities will persist throughout the rest of the year. The local stock exchange has traditionally drawn foreign investors via sizable and liquid companies, notably the banking sector and telecommunications giant Safaricom.

However, the restricted presence of technology-focused companies listed on the NSE has constrained local investors' capacity to directly engage in some of the global equity trends that have attracted substantial capital in recent years.