Equities Market Performance Inconsistent as Turnover Hits 203.6%

The equities market for the past one week recorded mixed performances with NSE 20 and NSE 25 gaining by 0.5 and 0.6 percent respectively. NASI, on the other hand, declined by 0.3 percent.

The trend took YTD performance to declines of 24.0, 15.7 and 14.8 percent, for NSE 20, NSE 25 and NASI, respectively.

The week’s performance was driven by gains in large-cap counters such as Bamburi, Equity, and KCB Group, which gained by 5.6, 4.6, and 0.7 percent, respectively.

For the last twelve months (LTM), NASI, NSE 25 and NSE 20 have declined by 8.7, 11.2 and 21.7 percent, respectively.

The market’s turnover showed positive results with an elevation of 203.6 percent to 80.5 million US dollars from 26.5 million dollars the previous week. This brought the YTD turnover to 1.6 billion dollars.

Foreign investors remained net sellers, with net weekly outflows decreasing by 9.6 percent to 11.7 million dollars, from 12.9 million dollars previously.

According to Cytonn Investments, the market is projected to remain subdued in the near-term as international investors exit the broader emerging markets due to the expectation of rising US interest rates coupled with the global strengthening US Dollar.

AT the moment, the trading price to earnings ratio (P/E) stands at 11.9x, which is 11.8 percent below the historical average of 13.5x, and a dividend yield of 4.9 percent, higher than the historical average of 3.8 percent.

The current P/E valuation of 11.9x is 21.0 percent above the most recent trough valuation of 9.8x experienced in the first week of February 2017, and 42.7 percent above the previous trough valuation of 8.3x experienced in December 2011.