Equities Record Upward Trend with Turnover Increasing by 58.2%

The equities market was on an upward trend as compared to the previous week where traders experienced mixed performances from the stocks.

During the week, NASI, NSE 25 and NSE 20 recorded gains of 0.8, 0.9 and 0.5 percent, respectively, taking their YTD performance to gains/ (declines) of 3.2, (13.8) and (2.2 percent) respectively.

The performance in NASI was driven by gains in NIC Group, KCB Group, Bamburi and Barclays Bank, which rose by 6.6, 4.0, 3.8 and 1.4 percent, respectively.

The gains were weighed down by declines recorded in EABL, British American Tobacco (BAT) and Standard Chartered Bank Kenya, which recorded declines of 1.1, 1.0 and 1.0 percent, respectively.

Equities turnover increased by 58.2 percent during the week to USD 27.3 million, from USD 17.2 million the previous week, taking the YTD turnover to USD 1.0 billion.

Foreign investors turned net buyers for the week, with a net buying position of USD 5.5 million, from a net selling position of USD 1.3 million the previous week.

The market is currently trading at a price to earnings ratio (P/E) of 10.9x, 17.9 percent below the historical average of 13.3x, and a dividend yield of 5.5 percent, above the historical average of 3.9 percent.

With the market trading at valuations below the historical average, analysts from Cytonn Investments believe there is value in the market.

The current P/E valuation of 10.9x is 12.6 percent above the most recent trough valuation of 9.7x experienced in the first week of February 2017, and 31.6 percent above the previous trough valuation of 8.3x experienced in December 2011.

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