Last week, the equities market was on an upward trend, with NASI, NSE 20 and NSE 25 gaining 1.0, 0.1 and 2.1 percent respectively taking their YTD performance to 1.0 percent, (10.7 percent) and 5.6 percent for NASI, NSE 20 and NSE 25, respectively.
Last week’s performance was driven by a rally in the banking stocks as the Q2’2018 earnings season approaches.
Kenya Commercial Bank (KCB Group), Equity Holdings, Barclays Bank and Standard Chartered gaining 6.3, 4.6, 3.4 and 2.5 percent respectively.
For the last twelve months (LTM), NASI, NSE 20 and NSE 25 have gained 9.1 percent, (15.1 percent) and 4.5 percent respectively.
Equities turnover decreased by 44.0 percent during the week to USD 17.3 million from USD 30.9 million the previous week, with foreign investors dominating the market with a net selling position.
Market analysts from Cytonn Investments 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.
The market is currently trading at a price to earnings ratio (P/E) of 14.1x, which is 4.4 percent above the historical average of 13.5x, and a dividend yield of 3.9%, which is higher than the historical average of 3.7 percent.
The current P/E valuation of 14.1x is 43.9 percent above the most recent trough valuation of 9.8x experienced in the first week of February 2017, and 69.9 percent above the previous trough valuation of 8.3x experienced in December 2011.