In short
- NASI covers every listed company, weighted by size. It is the closest thing to “the market”.
- NSE 20 is an old price-based average of 20 counters. It can move against the market.
- NSE 25 and NSE 10 are size-weighted baskets of 25 and 10 companies.
- Index levels are not comparable with each other — only with their own history.
Every evening a news bulletin says the Nairobi bourse closed up or down. Up on what? There are four headline indices and they can disagree with each other on the same day, for reasons that have nothing to do with the news.
The four numbers
NASI — the NSE All Share Index
Introduced in 2008, NASI includes every company listed on the exchange and weights each by its market capitalisation — share price multiplied by shares in issue. A large company moves NASI more than a small one, in proportion to its size.
This is the index to use when you want to know how the Kenyan market as a whole did. It is also the one most affected by the largest counters: when a handful of companies make up a big share of total market value, NASI largely reports on them.
NSE 20 — the old one
The NSE 20 Share Index is the number Kenyans grew up hearing. It takes 20 selected companies and is price-weighted: a company’s influence depends on its share price, not its size.
That sounds like a technicality. It is not. A price-weighted average of 20 counters can rise on a day most of the market fell, simply because one high-priced constituent had a good day. Treat the NSE 20 as a long-running historical series, not as a description of today’s market.
NSE 25
A market-capitalisation weighted index of 25 companies, launched in 2015 to give a broad but investable measure — large enough to matter, small enough to track.
NSE 10
The newest of the four: ten of the most liquid counters, weighted by size. A concentrated read on the companies that actually trade in volume. Useful precisely because thin trading distorts the broader measures.
Why they disagree
Three reasons, all structural:
- Weighting. Price-weighted (NSE 20) versus size-weighted (the others). Different arithmetic, different answer.
- Coverage. Every company (NASI) versus a selected basket (the rest). A good day for small counters barely shows in NASI and may not show at all in NSE 10.
- Liquidity. A company whose price has not moved because nobody traded it still carries its full weight in an index. On the Nairobi exchange, where many counters trade thinly, that matters more than on larger markets.
What this means for your own portfolio
An index is a benchmark, not a target. Three practical uses:
- Context. Your shares fell 3% — did the market fall 3% too, or only yours?
- Honesty. If your picks have trailed NASI for years, that is information about your picks.
- Comparing like with like. Index levels have different bases and different starting dates. NSE 20 at 4,000 and NASI at 180 are not comparable numbers; only each one’s own change over a period is meaningful.
You can see what individual companies are doing on Ipahco’s markets page, and what a given period did to each of them on the performance page.
See this on the NSE, not in theory
Ipahco screens every company listed on the Nairobi Securities Exchange, tracks dividends and shows you which licensed brokers will open an account for you.
A caution about index levels in the press
Headlines like “the index hit a seven-year high” are about one series, usually the NSE 20, and say nothing about whether the typical Kenyan company gained. Check which index the number belongs to before drawing a conclusion from it — and look at whether the gain was broad or came from two or three heavyweight counters.
How a day’s prices come to exist in the first place is a separate story, covered in NSE trading hours and how prices are set.
Frequently asked questions
What is the difference between NASI and the NSE 20?
NASI covers every listed company and weights each by market value. The NSE 20 covers 20 selected companies and weights them by share price. They can move in opposite directions on the same day.
Which NSE index should I follow?
NASI, for the market as a whole. Add NSE 10 or NSE 25 if you care mainly about the larger, more liquid counters.
Can I buy an NSE index?
You cannot buy an index directly. Tracking it would mean buying its constituents in proportion, or an exchange traded fund that does so. Check what is currently listed and licensed before assuming a product exists.
Why did the index rise when my shares fell?
Because an index is an average, dominated by its largest or highest-priced members. A small or thinly traded company you own can fall on a day the index rises.
How many companies are listed on the NSE?
More than sixty counters trade on the exchange, across banking, telecommunications, manufacturing, agriculture, insurance and energy. Ipahco’s markets page lists every one we track, and the NSE’s own listings page carries the official count.
Education, not investment advice. Index constituents are reviewed periodically — check the NSE’s own publications for the current list.