The equities market recorded mixed performance for the second time this month, with NASI and NSE 25 recording gains of 2.1 and 2.0 percent, respectively, while NSE 20 recorded a loss of 0.2 percent.
This performance consequently took their Year To Date (YTD) performance to gains/(losses) of 16.7, (8.8) and 13.1 percent, for the NASI, NSE 20 and NSE 25, respectively.
According to Cytonn Investment’s Weekly Report, the performance in NASI was driven by gains recorded by large-cap stocks such as Equity Group, Safaricom and KCB Group of 3.4, 3.3, and 1.9 percent, respectively.
Equities turnover increased by 26.6 percent during the week to USD 41.8 million, from USD 33.0 million the previous week, taking the YTD turnover to USD 1,486.5 million.
Foreign investors became net buyers for the week, with a net buying position of USD 6.7 million, a 40.6 percent improvement from a net buying position of USD 4.7 million recorded the previous week.
The market is currently trading at a price to earnings ratio (P/E) of 12.5x, 5.9 percent below the historical average of 13.3x, and a dividend yield of 5.7 percent, 1.8 percent points 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 12.5x is 28.7 percent above the most recent trough valuation of 9.7x experienced in the first week of February 2017, and 50.4 percent above the previous trough valuation of 8.3x experienced in December 2011.
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