Market News

Safaricom Lost 6.1%, NCBA And DTB Shed Off 3.4% At The NSE

BY Soko Directory Team · February 28, 2022 11:02 am

KEY POINTS

The market is currently trading at a price-to-earnings ratio (P/E) of 10.5x, 19.0 percent below the historical average of 12.9x, and a dividend yield of 3.8 percent, 0.2 percentage points below the historical average of 4.0 percent.

KEY TAKEAWAYS

The equities turnover increased by 21.0 percent to USD 20.5 million, from USD 17.0 mn recorded the previous week, taking the YTD turnover to USD 155.8 million.

The equities market was on a downward trajectory, with NASI, NSE 20, and NSE 25 declining by 4.2, 1.7, and 3.2 percent respectively.

The performance took their YTD performance to losses of 4.2, 1.6, and 3.2 percent for NASI, NSE 20, and NSE 25, respectively.

The equities market performance was driven by losses recorded by large-cap stocks such as Safaricom of 6.1 percent, with NCBA and Diamond Trust Bank (DTB-K) both recording losses of 3.4 percent. The losses were however mitigated by gains recorded by stocks such as BAT of 1.4 percent.

The equities turnover increased by 21.0 percent to USD 20.5 million, from USD 17.0 mn recorded the previous week, taking the YTD turnover to USD 155.8 million.

Foreign investors remained net sellers, with a net selling position of USD 3.6 mn, from a net selling position of USD 0.5 mn recorded the previous week, taking the YTD net selling position to USD 2.4 mn.

Notably, this week’s P/E is the lowest it has been since November 2020. Key to note, NASI’s PEG ratio currently stands at 1.3x, 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 10.5x is 35.8 percent above the most recent trough valuation of 7.7x experienced in the first week of August 2020.

Rates in the Fixed Income market have remained stable due to the relatively ample liquidity in the money market. The government is 16.7% ahead of its prorated borrowing target of Kshs 443.2 bn having borrowed Kshs 517.3 bn of the Kshs 658.5 bn borrowing target for the FY’2021/2022.

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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