Kenya is opening a new door for investors looking to tap into its booming banking industry, after the Capital Markets Authority (CMA) approved the country’s first locally domiciled Exchange Traded Fund (ETF). The WSA Banking Index ETF, issued by Wall Street Africa Group in partnership with Tradiam Asset Managers, is expected to list on the Nairobi Securities Exchange (NSE) in the fourth quarter of 2026, subject to the completion of outstanding listing and operational requirements. The fund will give investors a simpler way to gain exposure to multiple listed banks through a single investment.
The approval comes as Kenya’s banking sector continues to dominate the local stock market. Listed banks are currently valued at about KSh 1.64 trillion, representing roughly 41% of the NSE’s total market value. The sector has also delivered strong returns, with the NSE Banking Sector Index gaining 62% since its launch in October 2025 and rising 30.9% in the first seven months of 2026. The rally has been widespread, with major banking stocks including I&M Holdings, Stanbic Holdings and Co-operative Bank recording significant gains this year.
Investors are also watching the sector because of its growing profitability. The 11 banking groups that make up the underlying index generated a combined KSh 287.73 billion in profit after tax in 2025, up 17.3% from KSh 245.38 billion in 2024. Over the past decade, combined profits have more than tripled from KSh 89.42 billion in 2015. That earnings growth has helped strengthen investor confidence and contributed to the banking sector becoming the largest concentration of market value on the NSE.
The new ETF will initially track 11 banking counters, including Equity Group, KCB Group, Co-operative Bank of Kenya, Absa Bank Kenya, NCBA Group, Standard Chartered Bank Kenya, Stanbic Holdings, I&M Group, Diamond Trust Bank Kenya, HF Group and BK Group. Family Bank is not included for now because it must first complete at least six months of trading on the NSE before it can qualify for consideration under the index rules. Because the ETF and its underlying shares are denominated in Kenya shillings, investors will also avoid foreign-exchange exposure linked to the underlying holdings.
For Kenya’s capital markets, the approval represents more than just another investment product. It marks the arrival of the first locally domiciled ETF on the NSE, giving investors a diversified way to participate in the country’s banking growth without having to buy each banking stock individually. CMA Chief Executive Wyckliffe Shamiah said the product supports efforts to encourage innovation, expand investment choices and deepen Kenya’s capital markets. With the NSE recently surpassing KSh 4 trillion in total market capitalisation, the ETF could arrive at a particularly important moment for Kenya’s fast-growing equity market.
source: kenyanwallstreet
