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Equities Turnover Declined By 25.4% To USD 15.3 Mn From USD 20.5 Mn

BY Soko Directory Team · December 28, 2021 09:12 am

KEY POINTS

The equities market was on an upward trajectory, with NASI, NSE 20, and NSE 25 gaining by 4.8, 2.5, and 4.6 percent, respectively.

KEY TAKEAWAYS

The equities market performance was driven by gains recorded by large-cap stocks such as EABL, Safaricom, and Bamburi of 13.3, 5.4, and 4.4 percent.

During the week, the equities market was on an upward trajectory, with NASI, NSE 20, and NSE 25 gaining by 4.8, 2.5, and 4.6 percent, respectively.

The performance took their YTD performance to gains of 12.2, 1.6, and 10.3 percent for NASI, NSE 20, and NSE 25, respectively.

The equities market performance was driven by gains recorded by large-cap stocks such as EABL, Safaricom, and Bamburi of 13.3, 5.4, and 4.4 percent, respectively.

Additionally, the gains recorded in the equities market during the week are attributable to increased buying activity from local institutional investors as they rebalance their portfolios for the end of the year. The gains were however weighed down by a marginal 0.3 percent loss recorded by the Equity group.

During the week, equities turnover declined by 25.4 percent to USD 15.3 million, from USD 20.5 million recorded the previous week, taking the YTD turnover to USD 1.2 billion.

Foreign investors remained net sellers, with a net selling position of USD 5.6 million, from a net selling position of USD 4.3 million recorded the previous week, taking the YTD net selling position to USD 90.4 million.

The market is currently trading at a price-to-earnings ratio (P/E) of 12.6x, 2.9 percent below the historical average of 12.9x, and a dividend yield of 3.4 percent, 0.6 percentage points below the historical average of 4.0 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.

The current P/E valuation of 12.6x is 63.0 percent above the most recent trough valuation of 7.7x experienced in the first week of August 2020.

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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