Kenya’s equities market closed bearish in the week ending August 7, 2020, with a dip in the Nairobi Securities Exchange All Share Index (NASI), NSE 20 Share Index (NSE 20) and NSE 25 Share Index (NSE 25) recording declines of 2.0 percent, 2.6 percent, and 2.3 percent, respectively.
The number of shares traded and equity turnover rose by 94.0 percent and 54.2 percent, respectively during the week,” the CBK said in its weekly bulletin.
The NASI performance was driven by declines recorded by large-cap stocks, with the highest declines being recorded in ABSA, KCB, and NCBA, which lost by 4.4 percent, 4.2 percent, and 3.9 percent, respectively.
Equities turnover rose by 90 percent during to $26.9 million ( KSh2.9 billion) taking the Year-to-date (YTD) turnover to $961.2 million (KSh103.8 billion).
“The market is currently trading at a price to earnings ratio (P/E) of 7.7x, 41.1 percent below the historical average of 13.1x. The average dividend yield is currently at 5.4 percent, 0.1 percent points above the 5.3 percent recorded the previous week and 1.4 percent points above the historical average of 4.0 percent,” says Cytonn Investments.
“The rise in dividend yield is attributable to price declines recorded by most stocks, however, the dividend yield has been weighed down by the decision by most companies to withhold dividend payments.”
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“Foreign investor sentiment turned bearish but sustained accumulation on Equity Group and EABL. In the recent 2 weeks, we have noted dissipation of heavy foreign outflows that would range from Ksh 500 million to Ksh 1Billion especially in 2Q20 period.
It is likely that foreign sentiment is at a turning point looking favorably at the battered down prices of most of these counters that have recently hit multi-year lows,” comment from Genghis Capital Cross-Asset Weekly Strategy.
