Last week, the equities market was on a downward trend, with NASI, NSE 20 and NSE 25 declining 3.1, 1.5 and 3.1 percent respectively.
The downward performance took the year-to-date performance of the NASI, NSE 20 and NSE 25 to 0.9 percent, (11.1 percent) and 4.2 percent respectively.
Last week’s performance was driven by declines in large-cap stocks such as Safaricom, BAT, KCB Group, EABL and Equity, which declined by 4.2, 3.0, 1.5, 1.4 and 1.0 percent respectively.
For the last twelve months (LTM), NASI and NSE 25 have gained 11.9 percent and 9.2 percent respectively, while NSE 20 has declined by 8.7 percent.
Equities turnover increased by 9.4 percent last week to USD 35.3 million from USD 32.3 million the previous week with foreign investors making up the bulk of market activity during the week
“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 analysts from Cytonn.
The market is currently trading at a price to earnings ratio (P/E) of 14.0x, which is above the historical average of 13.5x, and a dividend yield of 3.9 percent which exceeds the historical average of 3.7 percent.
The current P/E valuation of 14.0x is 42.9 percent above the most recent trough valuation of 9.8x experienced in the first week of February 2017, and 68.7 percent above the previous trough valuation of 8.3x experienced in December 2011.