During the past week, the equities market registered an upward trend with NASI, NSE 20 and NSE 25 gaining by 1.9, 2.1 and 2.7 percent, respectively.
As a result of the gains, the YTD performance for the three were taken to 3.4, 0.6 and 4.0 percent, in that order.
The gain in NASI was mainly driven by gains in the banking sector stocks such as NIC Group, which gained by 7.6 percent, Equity Group Holdings by 6.4 percent, KCB Group by 5.1 percent and Barclays Bank of Kenya, which gained by 5.0 percent.
Equities turnover gained by 58.7 percent during the week to 34.7 million US Dollars, from 21.9 million dollars the previous week, taking the YTD turnover to 63.9 million dollars.
Foreign investors remained net sellers for the week, with a net selling position of 2.2 million dollars, which is a 12.1 percent increase from last week’s net selling position of USD 1.9 million dollars.
Currently, the market is currently trading at a price to earnings ratio (P/E) of 11.8x, 11.9 percent below the historical average of 13.4x, and a dividend yield of 5.0 percent, above the historical average of 3.8 percent.
With the market trading at valuations below the historical average, Cytonn Investments believes there is value in the market.
The current P/E valuation of 11.8x is 21.6 percent above the most recent trough valuation of 9.7x experienced in the first week of February 2017, and 42.2 percent above the previous trough valuation of 8.3x experienced in December 2011.