Equities Sent Mixed Signals In First 3 Months Of 2021

By Soko Directory Team / Published April 5, 2021 | 10:40 am

KEY POINTS

NASI, NSE 20, and NSE 25 lost by 3.5, 2.0, and 2.9 percent, driven by losses recorded by large-cap stocks such as Cooperative Bank, EABL, and Equity Group of 12.1, 5.8, and 4.8 percent.

During Q1’2021, the equities market recorded a mixed performance, with NASI and NSE 25 gaining by 4.3 and 3.4 percent, respectively, while NSE 20 declined by 1.2 percent.

The performance during the first quarter took their YTD performance as at the end of March to gains of 4.3 and 3.4 percent for NASI and NSE 25, respectively, while NSE 20 declined by 1.2 percent.

The equities market performance during the quarter was driven by gains recorded by large caps such as BAT Kenya, KCB Group, Safaricom, and Co-operative Bank of 31.6, 8.4, 5.8, and 5.6 percent respectively.

The gains were however weighed down by losses recorded by stocks such as Diamond Trust Bank (DTB-K), ABSA Bank, and NCBA Group of 16.3, 8.7, and 6.0 percent respectively.

Equities turnover increased by 15.2 percent during the quarter to USD 288.5 million, from USD 250.5 million in Q4’2020.

Foreign investors remained net sellers during the quarter with a net selling position of USD 8.9 million, from a net selling position of USD 24.5 recorded in Q4’2020.

During the week, the equities market was on a downward trajectory with NASI, NSE 20, and NSE 25 losing by 3.5, 2.0, and 2.9 percent, driven by losses recorded by large-cap stocks such as Cooperative Bank, EABL, and Equity Group of 12.1, 5.8, and 4.8 percent.

The losses were however mitigated by gains recorded by NCBA Group, which gained by 9.7 percent.

During the week, equities turnover increased by 32.1 to USD 29.0 mn from USD 21.9 mn recorded the previous week, taking the YTD turnover to USD 294.2 mn.

During the week, foreign investors turned net sellers, with a net selling position of USD 9.1 mn, from a net buying position of USD 4.4 mn recorded the previous week.

The market is currently trading at a price-to-earnings ratio (P/E) of 12.1x, 6.7 percent below the historical average of 12.9x, and a dividend yield of 3.8 percent, 0.3 percentage points below the historical average of 4.1 percent.

Key to note, NASI’s PEG ratio currently stands at 1.4x, an indication that the market is trading at a premium to its future earnings growth. Basically, a PEG ratio greater than 1.0x indicates the market may be overvalued while a PEG ratio less than 1.0x indicates that the market is undervalued.

About Soko Directory Team

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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