Nairobi Securities Market’s Momentum Still Negative, Its 3rd Week

Nairobi Securities Market’s Momentum Still Negative, Its 3rd Week

Image I Courtesy NSE

Trading at the Nairobi Securities Exchange (NSE) continued to exhibit weakness with NASI, NSE 25, and NSE 20 all recording losses of 0.1 percent, 0.5 percent, and 0.8 percent, respectively.

This was mainly attributed to losses recorded by large-cap stocks such as ABSA, BAT and Equity Group, which declined by 4.1 percent, 3.0 percent and 2.9 percent, respectively. 

During the week ending October 8, market capitalization, equity turnover, and the total number of shares traded declined by 0.2 percent, 39.0 percent, and 45.0 percent, respectively. 

Foreign investors remained net sellers during the week, with a net selling position of USD 2.0 mn, from a net selling position of USD 2.8 mn recorded the previous week, taking the YTD net selling position to USD 259.2 mn. 

During the week, Safaricom Plc was the most traded company by turnover. 21.6 million shares valued at KSh 652 million were traded accounting for 55.20 percent and 46.25 percent to the total equity turnover and volumes traded in the week, respectively.

On the other hand, the Banking Sector was second in market activity, with shares worth KSh 363M transacted which accounted for 30.76 percent of the week’s traded value. 

Equity Group Holdings Plc shed 2.92 percent in price action to Ksh 34.90, down from Ksh 35.95 registered last week with shares worth Ksh 266 million transacted. 

KCB Group Plc declined 1.04 percent to Ksh 38.10, moving 904,000 shares valued at Ksh 34 million.

“The market is currently trading at a price to earnings ratio (P/E) of 9.3x, 28.5% below the 11-year historical average of 13.0x. The average dividend yield is currently at 5.0%, unchanged from the previous week and 1.0% points above the historical average of 4.0%. 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,” Analysts from Cytonn Investments state.