The Kenyan equities market had an upward trend in the first quarter of 2019 gaining by 12.2 percent and declined in the second quarter of 2019 by 5.9 percent.
These trends in the equities market brought the half-year gains for NASI and NSE 25 to 5.6 percent and 0.6 percent, respectively, and a decline for NSE 20 by 6.5 percent.
According to analysts from Cytonn Investments, the decline in market performance during the second quarter was as a result of declines in large-cap stocks such as Co-operative Bank, NIC Group, KCB and Bamburi which gained by 19.7, 13.6, 13.2 and 12.9 percent, respectively.
During the week, the equities market was on an upward trend with NASI, NSE 25 and NSE 20 gaining by 0.7, 0.4 and 0.1 percent, respectively, due to gains in large-cap stocks such as NIC, Safaricom, and EABL, which gained by 3.0, 2.8 and 2.1 percent, respectively.
For the last twelve months (LTM), NASI, NSE 25 and NSE 20 have declined by 14.9, 19.8 and 19.3 percent, respectively.
Equity turnover declined by 29.7 percent to 773.7 million shillings in H1’2019, from USD 1.1 billion in H1’2018.
The market is currently trading at a price to earnings ratio (P/E) of 11.7x, 12.7 percent below the historical average of 13.4x.
The market has a dividend yield of 5.3 percent, above the historical average of 3.8 percent.
“We are positive on equities for investors as the sustained price declines have seen the market P/E decline to below its historical average,” says Cytonn Investment.
Analysts expect increased market activity, and possible increased inflows from foreign investors, as they take advantage of the attractive valuations to support the positive performance.