NASI, NSE 20 and NSE 25 On An Upward Trend During the Week

The equities market during the week registered an upward trend, with NASI, NSE 20 and NSE 25 rising 4.4 percent, 1.2 percent, and 3.9 percent, respectively.

The consistency was driven by gains in the telecom and banking sector stocks such as Standard Chartered, Safaricom and Barclays Bank that gained 9.9 percent, 7.6 percent and 5.9 percent, respectively.

The last twelve months (LTM) have seen NASI, NSE 20 and NSE 25 gain 47.9 percent, 24.8 percent, and 44.7 percent, respectively.

Equities turnover, however, declined by 56.3 percent to USD 8.3 million from USD 19.1 million registered last week. According to Cytonn Investment, the expectation is that the market will remain supported by positive investor sentiment this year, as investors take advantage of the attractive stock valuations on select counters.

The market is currently trading at a price to earnings ratio (P/E) of 14.9x, which is 11.2 percent above the historical average of 13.4x, and a dividend yield of 3.4 percent, slightly below the historical average of 3.7 percent.

The current P/E valuation of 14.9x is 62.0 percent above the most recent trough valuation of 9.2x experienced in the first week of February 2017, and 79.5 percent above the previous trough valuation of 8.3x experienced in December 2011.