During the week, the equities market was on an upward trajectory, with NASI, NSE 20, and NSE 25 gaining by 1.4, 1.5, and 0.8 percent respectively.
The performance, according to Cytonn, took their YTD performance to gains of 1.4, 1.3, and 1.0 percent, for NASI, NSE 20 and NSE 25, respectively.
The equities market performance was driven by gains recorded by large-cap stocks such as BAT, Co-operative Bank, Bamburi, and Diamond Trust Bank (DTB-K) of 8.4, 4.0, 3.6, and 3.3 percent respectively.
The gains were however weighed down by losses recorded by other large-cap stocks such as NCBA Group, Standard Chartered Bank, and ABSA Bank of 4.3, 2.9, and 1.9 percent, respectively.
Equities turnover increased by 239.7 percent during the week to USD 14.6 mn, from USD 4.3 mn recorded the previous week, taking the YTD turnover to USD 14.6 million.
Foreign investors turned net sellers during the week, with a net selling position of USD 1.9 million, from a net buying position of USD 0.5 million recorded the previous week, taking the YTD net selling position to USD 1.9 million.
The market is currently trading at a price to earnings ratio (P/E) of 11.5x, 11.2 percent below the 11-year historical average of 12.9x.
The average dividend yield is currently at 4.6 percent, unchanged from what was recorded the previous week and 0.5 percent points above the historical average of 4.1 percent.
With the market trading at valuations below the historical average, we believe there are pockets of value in the market for investors with higher risk tolerance and are willing to wait out the pandemic.
The current P/E valuation of 11.5x is 49.1% above the most recent valuation trough of 7.7x experienced in the first week of August 2020.