BlackRock Inc., the world’s biggest asset manager, sees an opportunity to invest in Kenyan stocks, which have gone from the world’s worst performers in 2023 to the best this year.

The All-share stock index in Nairobi has surged 49%, when measured in dollars, rebounding from a 43% plunge in 2023, when the index was trading at levels last seen in 2011.

That’s all underpinned by changes to the country’s economic policy, according to Emily Fletcher, co-manager of the BlackRock Frontiers Investment Trust.

“This volatility has created opportunity,” she said in an emailed response. “Over the past two-years Kenya has seen substantial shifts in both fiscal and monetary policy.”

While President William Ruto’s government has come under criticism from citizens and companies for surging prices and increased taxes, inflation has begun to slow and the shilling has jumped, making it the world’s best performing currency this year.

Fletcher said Kenya’s bonds have also become more attractive as Ruto’s administration narrowed its fiscal deficit to about 4% of gross domestic product and doubled its benchmark interest rate to 13% over the past two years. With price growth moderating, government bonds are offering a “very attractive real rate” and the country has managed to refinance its eurobond, she added.

Kenya, which serves as a regional headquarters and production base for a number of companies, has East Africa’s biggest brewer, mobile phone service provider and banks listed on its bourse.

The gains have been led by financial firms. Equity Group Holdings Plc, the nation’s biggest lender by market value, has surged 73% in dollar terms, while rival KCB Group Plc has jumped 66%. Safaricom Plc, Kenya’s largest mobile-phone company, advanced 54%. In the 63-member index just one stock has dropped this year.

The index trades at a price-to-earnings ratio of about 5.6 times. In comparison, South African stocks are at 12 times, while Nigeria at 15.9 times. South Africa’s benchmark stock index has fallen 4.2% in dollar terms while Nigeria’s has declined 4.1%.

BlackRock Frontiers Investment owns shares in Equity Group, according to data compiled by Bloomberg.

“With a stable political backdrop, improving macroeconomic outlook and a stock market trading on five times PE, perhaps it is time for investors to re-look at the market,” Fletcher said.

BlackRock’s first private investment in Africa was made in Kenya when the company bought a stake in Africa’s largest wind farm, in a deal first announced in 2023.