Shifting Stock Performances Push Equities Turnover Up by 123.6%

The stock market during the past week registered some inconsistencies with the equities market realizing mixed performances.

During the week, NASI and NSE 25 gained by 2.1 and 2.2 percent, respectively, whereas NSE 20 remained flat.

The equities YTD performance was elevated by gains of 8.8, 2.0, and 7.6 percent, for NASI, NSE 20 and NSE 25, respectively.

The performance in NASI was driven by gains in large-cap stocks such as EABL, KCB Group, and Safaricom, which gained by 10.7, 4.8 and 3.6 percent, respectively.

Equities turnover rose by 123.6 percent during the week to 55.8 million US dollars, from 24.7 million dollars the previous week, taking the YTD turnover to 350.6 million dollars.

Foreign investors turned net buyers for the week, with a net buying position of 4.6 million dollars, a positive shift from last week’s net selling position of 1.1 million dollars.

The market is currently trading at a price to earnings ratio (P/E) of 13.1x, 2.2 percent below the historical average of 13.4x, and a dividend yield of 4.7 percent, above the historical average of 3.8 percent.

According to Cytonn Investments weekly report, with the market trading at valuations below the historical average, there is value in the market.

The current P/E valuation of 13.1x is 35.1 percent above the most recent trough valuation of 9.7x experienced in the first week of February 2017, and 57.8 percent above the previous trough valuation of 8.3x experienced in December 2011.