Traders of equities at the Nairobi Securities Exchange (NSE) were hit with an optimistic performance the past week.
The market registered an upward trend and the value of shares issued by NSE 20, NASI, and NSE 25 all gained.
NSE 20 gained by 2.4 percent followed by NSE 25 that gained 1.3 percent whereas NASI realized a 0.2 percent increase.
The share value pushed the YTD performance to gains of 2.9 percent for NSE 20, 12.4 percent for NASI, and 11.6 percent for NSE 25.
The performance in NASI was driven by gains in large-cap stocks such as the East Africa Breweries Limited (EABL), which gained by 0.8 percent, Barclays Bank Kenya which registered a gain of 0.8 percent as well, and NIC Bank, which gained by 0.6 percent.
Equities turnover declined by 15.7 percent during the week to 23.2 million US dollars, from 27.5 million dollars the previous week, taking the YTD turnover to 497.0 million dollars.
Foreign investors were net sellers for the week, with the net selling position coming in at 2.5 million dollars, from last week’s net buying position of 0.5 million US dollars.
The market is currently trading at a price to earnings ratio (P/E) of 12.4x, 7.4 percent below the historical average of 13.4x, and a dividend yield of 4.7 percent, above the historical average of 3.8 percent.
“With the market trading at valuations below the historical average, we believe that there is still value in the market,” read a statement from Cytonn Investments weekly report.
The current P/E valuation of 12.4x is 27.7 percent above the most recent trough valuation of 9.7x experienced in the first week of February 2017, and 49.3 percent above the previous trough valuation of 8.3x experienced in December 2011.