“Foreign investors tend to have a number of mechanical criteria such as market cap and daily trading volumes. The bifurcation in performance at the NSE is entirely a consequence of foreign investor participation in the big cap counters,” said Satchu.

A pipeline of new products introduced at the NSE is poised to attract foreign interest, including real estate investment trusts. Plans are underway to set up a futures and derivatives market, giving the NSE higher international standing and by extension making investing at the bourse very lucrative.

“What we need at the bourse is more listings to increase options for local and foreign investors,” Musau added.

For a long period, the number of listed companies has not risen, stagnating at 58 for months.

“Foreigners are doing two things, diversifying their risks and taking advantage of high returns in emerging markets. The NSE must have a presence in such magazines as the Wall Street journal to attract more investors,” said Kariithi Murimi, a risk consultant.

In its 2013 program, the NSE has already introduced REITS as an alternative which will provide investors the opportunity to invest in the real estate sector without requiring large sums of money.

The bourse plans to establish a real estate investment trust market and trading platform.

NSE views these initiatives as being crucial to the development of the Kenyan Capital Markets and meeting the objectives of Vision 2030, to transform Kenya into a middle income country. Since the bourse entered a bull run in May 2012, it has been on a rally, driven largely by foreign investors who have been at the driver’s seat since. Local investors are beginning to capitulate and will also be lifting this market higher, in coming months.

Banking stocks remain attractive, especially now when most ones listed are releasing their half year numbers.

“Banks are enjoying wide net interest margins and for the most part have embraced a regional profile,” said Satchu. “With the East African Community, the second fastest growing region after ASEAN, investors are keen on the exposure. Forward PE Ratios are in single digits, price to book in many cases compelling as well.”