Equities Performance Leaves NSE Traders with Mixed Reactions

The equities market during the past week recorded mixed performance at the Nairobi Securities Exchange where NASI gained as NSE 20 registered a decline with NSE 25 share value remain flat.

NASI registered a marginal gain of 0.3 percent while NSE 20 recorded a 0.4 percent decline. NSE 25, on the other hand, remained unchanged.

The three values of shares in the market pushed the YTD performance to gains of 0.9 percent, 13.0 percent, and 11.4 percent, for NSE 20, NASI, and NSE 25, respectively.

Read Also: Commercial Banks Profit Increases by 30.7 Percent as NSE Shares Drop

According to Cytonn Investments Weekly Report, the performance of NASI was driven by gains in large-cap stocks such as Standard Chartered Bank and EABL, which gained by 3.2 percent and 2.7 percent, respectively.

Equities turnover declined by 25.5 percent during the week to 8.9 million US dollars, from 12.0 million dollars the previous week, taking the YTD turnover to 518.0 million dollars.

Foreign investors were net buyers for the week, with the net buying position coming in at 5.0 million dollars, from last week’s net selling position of 0.9 million US dollars.

The market is currently trading at a price to earnings ratio (P/E) of 12.4x, 7.0 percent below the historical average of 13.4x, and a dividend yield of 4.7 percent, above the historical average of 3.8 percent.

See Also: The Week in Focus: Performance of T-Bills, Bonds, Liquidity and Kenya Eurobonds

Cytonn holds that there is still value in the market since the market is trading at valuations below the historical average.

The current P/E valuation of 12.4x is 28.1 percent above the most recent trough valuation of 9.7x experienced in the first week of February 2017, and 49.8 percent above the previous trough valuation of 8.3x experienced in December 2011.