The Nairobi Securities Exchange is developing what it describes as East Africa’s first AI-focused ETF. The proposed product is intended to give Kenyan investors local access to the global artificial intelligence investment theme and could be introduced before the end of 2026, subject to regulatory discussions and market conditions.
NSE chief executive Frank Mwiti said the fund would track a basket of companies with direct AI exposure and would most likely trade in Kenyan shillings. The exchange may delay the launch if valuations in the global AI market appear excessive.
Key Overview
- Planned launch: Before the end of 2026, although the timing is not guaranteed.
- Investment theme: Public companies with direct exposure to artificial intelligence.
- Likely currency: Kenyan shillings.
- Regulatory status: The proposal is being discussed with the Capital Markets Authority.
- Risk control: The NSE may postpone the launch if it believes AI valuations are overheated.
- Unconfirmed details: The index provider, portfolio constituents, fees, hedging policy and minimum investment have not been announced.
NSE Seeks a Local Gateway to the Global AI Rally
The NSE wants to make global AI exposure easier to access for investors who currently use foreign brokers or international investment platforms. Mwiti cited Microsoft, OpenAI and Anthropic as reference points for the proposed fund.
Those names should not yet be treated as confirmed holdings. Microsoft is publicly listed, while OpenAI and Anthropic remained privately held as of the announcement date. The final structure may therefore use listed AI developers, semiconductor manufacturers, cloud providers and companies with investments or commercial links to private AI laboratories.
The product would broaden a Kenyan market still heavily influenced by banks, Safaricom and other traditional sectors. It would also support the exchange’s strategy of expanding investor access and product diversity.
Shilling Trading Would Not Automatically Remove FX Risk
Mwiti said the ETF would most likely be denominated in Kenyan shillings to reduce foreign-exchange friction for local investors. That would allow investors to buy and sell units without first converting their cash through an overseas brokerage account.
However, shilling denomination alone would not necessarily eliminate currency exposure. If the ETF holds dollar-, euro- or Asian-currency securities, movements in those currencies could still affect returns unless the fund uses a formal hedging strategy. The product prospectus will therefore need to explain its base currency, valuation process, custody arrangements and whether foreign-exchange exposure will be hedged.
The exchange must also define how it identifies a company as an AI stock. A transparent index methodology would help investors distinguish firms deriving meaningful revenue from AI from companies that merely mention the technology in their strategy.
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Retail Growth Strengthens the Case for New Products
The proposal comes during a strong period for Kenyan equities. The NSE 20 Share Index had risen by just over 30% in 2026 by the time of the announcement, while the equities market’s value had reached a record KSh4 trillion, according to Mwiti. He projected that capitalisation could reach KSh5 trillion by year-end if market momentum continued.
Improved digital access is also changing participation. Safaricom and the NSE launched Ziidi Trader in February 2026, allowing M-PESA users to buy and sell listed shares directly through the mobile-money application. Mwiti said the initiative had helped attract one million new investors.
That headline figure should be assessed against active trading data. Earlier disclosures showed about 84,000 investors bought shares through Ziidi Trader during February and March, illustrating the difference between potential users, registered investors and people who have completed trades.
Launch Timing Will Depend on Valuation and Regulation
The NSE is monitoring concerns that the global AI rally may have moved too quickly. Delaying the fund could protect new investors from entering a concentrated thematic product immediately before a major market correction, but waiting too long could also reduce the exchange’s ability to capture current demand.
The exchange is separately considering a cryptocurrency ETF linked to Bitcoin, Ethereum and Solana. Kenya’s Virtual Asset Service Providers Act took effect in November 2025, and implementing regulations were gazetted in July 2026. A crypto ETF would nevertheless require its own regulatory approvals, custody safeguards, valuation rules and investor-protection framework.
For the AI ETF, the next decisive disclosures will be the fund manager, benchmark, eligible securities, portfolio weighting rules, fees, liquidity arrangements and launch approval. Until those details are published, the initiative remains a planned product rather than an investable offer.
Sources: Reuters / Nairobi Securities Exchange / Safaricom / Business Daily / Kenya Law
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