By Kenyan WallStreet

Uganda’s Parliamentary Pensions Scheme (PPS) is considering reducing its investments in Kenya due to macroeconomic challenges.

• The scheme’s total equity assets stand at UShs. 24 billion, out of which two percent is in Kenya.
• In its most recent financials, the scheme reported a gross investment income UShs. 55 billion and total assets of 425 billion.
• The growth in total assets marked a significant growth from UShs. 349 billion in 2021/2022 to Shs. 425billion in 2022/2023.

“We…propose to reduce allocation on stocks listed on Nairobi Securities Exchange and selectively reallocate to stocks on the Uganda Securities Exchange with focus on companies with attractive dividend yields and valuations,” Esther Namirembe, an officer working with GenAfrica Assets Managers, told the scheme’s Annual General Meeting on 23rd Feb.

According to the asset managers, the macroeconomic challenges in Kenya continue to dampen the stock market outlook despite positive earnings, attractive dividends and valuations.

Other strategies include allocation to short to mid-term government securities of two to three years to improve mid-term access and plan for the “significant liquidity event” of the 2026 elections.

Why It Matters

While the pension scheme’s equity investments in Kenya are fairly small for its total portfolio, the proposed exit marks yet another foreign investor flight from Kenya’s equity markets.

This continued trend where foreign investors have mainly triggered outflows in the recent past. In total, foreign investors withdrew about $1.1 million from the Nairobi bourse in January 2024.

Instead, investors have shown appetite for the bond market, with the NSE reporting record breaking turnover of over KShs. 170bn in a single week in late February.

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