The equities market, for the past week, posted gains with NASI, NSE 20 and NSE 25 rising to the hope of investors.
The three equities rose by 3.8, 5.2, and 3.5 percent, taking their YTD performance to 14.2, 8.0 and 14.5 percent, for NASI, NSE 20 and NSE 25, respectively.
The gain in NASI was mainly driven by gains in large-cap banking stocks such as NIC Group, Barclays Bank, KCB Group and Standard Chartered Bank, which gained by 10.1, 7.0, 6.6 and 5.9 percent, respectively.
Equities turnover declined by 0.9 percent during the week to 59.7 million US dollars, from 60.3 million the previous week, taking the YTD turnover to 216.8 million.
Foreign investors remained net sellers for the week, with a net selling position of 3.6 million dollars, which is a 52.4 percent decrease from last week’s net selling position of 7.6 million dollars.
Currently, the market is trading at a price to earnings ratio (P/E) of 10.7x, 25.2 percent below the historical average of 13.4x, and a dividend yield of 4.5 percent, above the historical average of 3.8 percent.
According to Cytonn Investments, with the market trading at valuations below the historical average, there is value in the market.
The current P/E valuation of 10.7x is 10.2 percent above the most recent trough valuation of 9.7x experienced in the first week of February 2017, and 28.6 percent above the previous trough valuation of 8.3x experienced in December 2011.