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Equities Register a Downward Trend as Turnover Increases by 14.4%

BY Soko Directory Team · August 26, 2019 05:08 am

The equities market was on a downward trend in the 4th week of August 2019, with NASI, NSE 20 and NSE 25 declining by 1.0, 2.5 and 1.2 percent, respectively.

This performance took their Year-To-Date (YTD) performance to gains/losses of 6.6, (12.6) and 0.1 percent, for NASI, NSE 20 and NSE 25, respectively.

According to analysts from Cytonn Investments, the performance in NASI was driven by declines in Co-operative Bank, Bamburi Cement, Safaricom PLC, and Standard Chartered Bank, which fell by 3.8, 2.8, 2.4 and 1.4 percent, respectively.

Nonetheless, Equities turnover increased by 14.4 percent during the week to USD 29.5 million, from USD 25.8 million the previous week, taking the YTD turnover to USD 945.4 million.

During the previous week, equities turnover had increased by 259.1 percent to USD 25.8 million taking their YTD turnover to USD 915.8 million.

Foreign investors remained net buyers for the week, with a net buying position of USD 11.6 million, from USD 22,762.3 the previous week.

The market is currently trading at a price to earnings ratio (P/E) of 11.3x, 15.0 percent below the historical average of 13.3x, and a dividend yield of 5.3 percent, 1.5 percent points above the historical average of 3.8 percent.

With the market trading at valuations below the historical average, we believe there is value in the market. The current P/E valuation of 11.3x is 16.5 percent above the most recent trough valuation of 9.7x experienced in the first week of February 2017, and 36.1 percent above the previous trough valuation of 8.3x experienced in December 2011.

Read Also: Equities Turnover Increases by 259.1% Amidst Mixed Performances

Soko Directory is a Financial and Markets digital portal that tracks brands, listed firms on the NSE, SMEs and trend setters in the markets eco-system.Find us on Facebook: facebook.com/SokoDirectory and on Twitter: twitter.com/SokoDirectory

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