Safaricom PLC, listed Kenyan mobile network operator, was the top mover at the Nairobi Securities Exchange contributing 52.9 percent of the market activity, with shares worth Ksh 1.4 billion being traded week ending June 26, 2020.
However, its share price declined 7.8 percent, from the KSh 30.90 the previous week, to close Friday at Ksh 28.50.
On Friday, the telco accounted for 73.4 percent of total turnover, followed by Equity Bank at 7.2 percent. During the day, foreign investors were net sellers for the sixth straight session, registering net outflows of USD 1.1 million with Safaricom recording the bulk of the net outflows of USD 967k.
However, the equities market was on a downward trajectory during the week, “The number of shares traded increased by 25.1 percent. However, the NASI and the NSE 20 share price index declined by 5.1 percent and 1.7 percent, respectively, during the week ending June 25. Similarly, market capitalization and equity turnover declined by 5.1 percent and 1.1 percent, respectively,” according to the Central Bank Weekly Bulletin.
“NASI performance was driven by losses recorded by large-cap stocks such as Bamburi, Safaricom, EABL, Equity Group, and NCBA, which lost by 20.3 percent, 7.8 percent, 2.9 percent, 2.2 percent, and 1.6 percent, respectively. The loss was, however, slowed down by gains recorded by other large-cap stocks such as DTBK, ABSA, and BAT of 2.9 percent, 2.4 percent and 1.3 percent, respectively,” Cytonn Investments said in their update.
The week’s turnover was lower, with 146 million shares traded valued at Ksh 2.7 billion against 133 million shares valued at Ksh 3.2 billion transacted the previous week.
Foreign investors remained net sellers during the week, with a net selling position of USD 12.3 million, from a net selling position of USD 0.5 million recorded the previous week, taking the YTD net selling position to USD 213.7 million.
“The market is currently trading at a price to earnings ratio (P/E) of 8.2x, 37.5% below the historical average of 13.1x. The average dividend yield is currently at 5.1 percent, an increase from the 4.9 percent recorded the previous week, and 1.1 percent points above the historical average of 4.0 percent. The increase in dividend yield is mainly attributable to price declines recorded by most stocks during the week,” Cytonn Investments adds.
“The general market exuded bearishness in close reflection to global equity markets during the week which saw rising Covid-19 cases in countries such as India and US, as risks of a wave two cycle of the pandemic rises,” said investment bank Genghis Capital in a weekly market report.