Bear Run: NSE Drops Below 2,000 Points as Coronavirus Worries Weigh on Valuations

Nairobi Bourse Equity Turnover Declines, Foreign Investors Dominate Trading

The Nairobi Securities Exchange (NSE) 20-Share Index slipped below 2,000 points Monday, deepening the bear run at the bourse as coronavirus concerns weighed on valuations.

The index closed at  1958.55 basis points. 

The All-share Index and the NSE25 share indices shed 4.72 and 132.33 points to close at 128.21bps and 3092.10 bps respectively.

NSE 20 Share Index Drops

Last week, the equities market regressed for the second week with the NASI, NSE-20 and NSE-25 falling 0.5%, 4.7% and 3.4%, respectively, week on week.

Investor activity declined with turnover dipping to KEsh 4.70Bn compared to Ksh 5.40Bn a week earlier.

Foreign investors accounted for 67.2% of total turnover and were net sellers withdrawing Ksh 2.30Bn compared to Ksh2.87Bn in withdrawals last week.

Nairobi Securities Exchange Key Index in Free Fall as Large Stocks Decline

Value investing opportunities

On the flip side, Genghis Capital says besides the equities market regressing, the impact of the coronavirus pandemic has opened up value investing opportunities in the country.

 For instance, for long term value investors, they recommend they take positions in KCB Group and Equity Group as the prices retreat below the Ksh 40.0 price level. 

“Following the steep fall in the financial markets, the current price-to-book multiples and dividend yields (both cum dividend) present attractive entry points for establishing positions. 

Additionally, the two banks maintain the best ROE (above 20%) in the listed banking sector.”

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