Foreign Investors cash out Sh42Bn from NSE in 2018
NAIROBI, Kenya, Jan 8 – Foreign investors at the Nairobi Securities Exchange (NSE) cashed out Sh42 billion in 2018 compared to Sh11 billion in 2017.
Analysts at Cytonn Investments say the foreign investor outflows during the year can be attributed to negative investor sentiment, as international investors exited the broader emerging markets due to the expectation of rising US interest rates, coupled with the strengthening US Dollar.
Equity turnover at the Nairobi Bourse during the year rose by 2.3 percent to Sh172 billion from Sh168 billion in 2017.
Safaricom continues to be a key part of Kenyan equities portfolios, accounting for 42.4 percent of NSE’s market capitalization, and has dominated on both the market turnover and in determining the direction of the market given its weight and liquidity in the Nairobi Securities Exchange.
The market is currently trading at a price to earnings ratio (P/E) of 10.7x, 19.9 percent below the historical average of 13.4x, and a dividend yield of 5.2 percent, above the historical average of 3.8 percent.
“The current P/E valuation of 11.0x is 9.6% above the most recent trough valuation of 9.8x experienced in the first week of February 2017, and 29.2% above the previous trough valuation of 8.3x experienced in December 2011. The charts below indicate the historical P/E and dividend yields of the market,” says the latest Cytonn Report.