Equities Register Mixed Performance as NSE 20 Stocks Remain Flat

Equities at the Nairobi Securities Exchange (NSE) registered mixed performances where NASI and NSE 25 gained as NSE 20 slumped.

According to Cytonn Weekly report, NASI and NSE 25 gained by 1.2 percent and 1.3 percent, respectively, whereas NSE 20 remained flat.

Overall the three stocks took their YTD performance to gains of 13.5, 0.5, and 12.3 percent, respectively.

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The performance in NASI was driven by gains in large-cap stocks such as Equity Group, KCB Group, and Safaricom, which gained by 4.0, 1.7, and 1.6 percent, respectively.

On the other hand, equities turnover declined by 10.4 percent during the week to 27.5 million US dollars, from 30.7 million dollars the previous week, taking the YTD turnover to 473.8 million dollars.

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Foreign investors remained net buyers for the week, although the net buying position declined by 93.7 percent to 0.5 million dollars, from last week’s net buying position of 7.2 million dollars.

The market is currently trading at a price to earnings ratio (P/E) of 12.5x, 6.7 percent below the historical average of 13.4x, and a dividend yield of 4.7 percent, above the historical average of 3.8 percent.

Read NASI, NSE 25 Equities Gain as NSE 20 Drops at Nairobi Securities Exchange

Cytonn Report notes that with the market trading at valuations below the historical average, there is value in the market.

The current P/E valuation of 12.5x is 28.9 percent above the most recent trough valuation of 9.7x experienced in the first week of February 2017, and 50.6 percent above the previous trough valuation of 8.3x experienced in December 2011.