KEY POINTS
The equities market performance was driven by gains recorded by large-cap stocks such as EABL, BAT, KCB Group, and Equity Group of 10.4, 3.6, 3.3, and 2.1 percent. The equities market recorded mixed performance, with NASI and NSE 25 gaining by 1.0 and 1.3 percent respectively, while NSE 20 declined by 0.8 percent. This took YTD performance to gains of 3.3 and 2.0 percent for NASI and NSE 25, and a loss of 0.3 percent for NSE 20.
The equities market performance was driven by gains recorded by large-cap stocks such as EABL, BAT, KCB Group, and Equity Group of 10.4, 3.6, 3.3, and 2.1 percent respectively.
The gains were however weighed down by losses recorded by banking stocks such as Diamond Trust Bank (DTB-K), Co-operative Bank, and Standard Chartered Bank which declined by 9.9, 3.2, and 1.1 percent respectively.
Equities turnover rose by 24.4 percent during the week to USD 28.5 million, from USD 22.9 million recorded the previous week, taking the YTD turnover to USD 109.0 million.
Foreign investors turned net sellers, with a net selling position of USD 4.5 million, from a net buying position of USD 0.7 mn recorded the previous week, taking the YTD net buying position to USD 1.2 million.
The market is currently trading at a price to earnings ratio (P/E) of 11.5x, 11.0 percent below the 11-year historical average of 12.9x.
The average dividend yield is currently at 4.5 percent, unchanged from what was recorded the previous week and 0.4% points above the historical average of 4.1 percent.
With the market trading at valuations below the historical average, we believe that there are pockets of value in the market for investors with a higher risk tolerance.
The current P/E valuation of 11.5x is 49.4 percent above the most recent valuation trough of 7.7x experienced in the first week of August 2020. More Articles From This Author
