Equities Register Mixed Performance as NSE 20 and NSE 25 Record Declines

The share value market at the Nairobi Securities Exchange (NSE) during the past week was faced with an inconsistent performance where only one of the equities registered gains.

According to the Cytonn Investments Weekly Report, the mixed performance was recorded after NSE 20 and NSE 25 declined by 1.5 percent and 0.2 percent, respectively.

On the other hand, NASI gained by 0.2 percent. The performance pushed the YTD performance to gains of 1.3, 12.6, and 11.4 percent, for NSE 20, NASI and NSE 25, respectively.

Where the value of shares gained, in this case, NASI, the performance was attributed to gains in large-cap stocks such as EABL, Safaricom and NIC Bank. These stocks gained by 2.1, 1.3, and 1.0 percent, respectively.

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The equities turnover declined by 48.3 percent during the week to 12.0 million US dollars, from USD 23.2 million the previous week. This pushed the YTD turnover to 509.0 million dollars.

Foreign investors were net sellers for the week, with the net selling position coming in at 0.9 million dollars, representing a 63.6 percent decline from last week’s net selling position of 2.5 million dollars.

Currently, the market is trading at a price to earnings ratio (P/E) of 12.3x, 7.8 percent below the historical average of 13.4x, and a dividend yield of 4.7 percent, above the historical average of 3.8 percent.

However, Cytonn Investments believes that with the market trading at valuations below the historical average, there is still value in the market.

The current P/E valuation of 12.3x is 27.1 percent above the most recent trough valuation of 9.7x experienced in the first week of February 2017, and 48.6 percent above the previous trough valuation of 8.3x experienced in December 2011.