The equities market was on an upward trend with NASI, NSE 20 and NSE 25 gaining by 1.2, 1.2, and 1.5 percent, respectively.
This trend took their Year to Date (YTD) performance to gains/losses of 6.9, (12.1) and 1.5 percent, for NASI, NSE 20 and NSE 25, respectively.
According to the Cytonn Weekly Report, the performance in NASI was driven by gains recorded by stocks mainly in the Banking sector with NCBA Group, Equity Group, and KCB Group recording gains of 5.2, 5.1, and 2.0 percent, respectively, as the market anticipates the repeal of the interest rate cap by the National Assembly.
Equities turnover increased by 13.3 percent during the week to USD 39.0 million, from USD 34.4 million the previous week, taking the YTD turnover to USD 1,171.1 million.
Foreign investors remained net sellers for the week, with a net selling position of USD 2.8 million, from a net selling position of USD 8.5 million recorded the previous week.
The market is currently trading at a price to earnings ratio (P/E) of 11.4x, 14.3 percent below the historical average of 13.3x, and a dividend yield of 6.2 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 11.4x is 17.4 percent above the most recent trough valuation of 9.7x experienced in the first week of February 2017, and 37.2 percent above the previous trough valuation of 8.3x experienced in December 2011.
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