NASI and NSE 25 Lose during the Week as NSE 20 gains

Last week saw equities market on a downward trend with NASI and NSE 25 losing 1.8 percent and 1.6 percent respectively while NSE 20 gained 0.3 percent during the week.

The performance took the YTD performance of the NASI, NSE 20 and NSE 25 to 4.8, 0.3 and 9.6 percent respectively.

The week’s performance was driven by declines in Standard Chartered, KCB Group, and Equity Group that declined by 11.0, 4.8, and 4.4 percent respectively.

For the last twelve months (LTM), NASI, NSE 20 and NSE 25 have gained 34.7, 7.7 and 32.8 percent respectively.

Equities turnover remained flat last week at USD 41.2 million. Foreign investors remained net sellers of large-cap stocks such as Safaricom.

“We expect the market to remain resilient this year supported by positive investor sentiment, as investors take advantage of the attractive stock valuations in select counters,” said Cytonn.

The market is currently trading at a price to earnings ratio (P/E) of 14.6x, which is 9.0 percent above the historical average of 13.4x, and a dividend yield of 3.6 percent, lower than the historical average of 3.7 percent.

The current P/E valuation of 14.6x is 49 percent above the most recent trough valuation of 9.8x experienced in the first week of February 2017, and 76 percent above the previous trough valuation of 8.3x experienced in December 2011.