During the week, the equities market was on an upward trajectory , with NASI, NSE 20, and NSE 25 all gaining by 0.6, 0.2, and 0.1 percent respectively.
The performance took their YTD performance to losses of 11.0, 32.3, and 19.6 percent for NASI, NSE 20, and NSE 25, respectively.
The equities market performance was mainly driven by gains recorded by large-cap stocks such as Safaricom and NCBA Group of 1.7 percent and 0.9 percent, respectively.
Other major notable gains were recorded by Stanbic holdings, Kenya Reinsurance, and Jubilee Holdings which gained by 9.0, 6.6, and 5.6 percent, respectively.
The gains were however weighed down by losses recorded by large-cap stocks such as Bamburi, ABSA Bank, and DTBK of 10.0, 4.2, and 2.9 percent, respectively.
Equities turnover declined by 23.3 percent during the week to USD 18.4 mn, from USD 24.1 mn recorded the previous week, taking the YTD turnover to USD 1.4 billion.
Foreign investors remained net sellers during the week, with a net selling position of USD 2.3 mn, from a net selling position of USD 1.6 mn recorded the previous week, taking the YTD net selling position to USD 279.8 mn.
The market is currently trading at a price to earnings ratio (P/E) of 10.9x, 15.6 percent below the 11-year historical average of 12.9x.
The average dividend yield is currently at 4.8 percent, unchanged from the previous week, and 0.7 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 10.9x is 41.7 percent above the most recent valuation trough of 7.7x experienced in the first week of August 2020. More Articles From This Author