BUSINESSMARKETSSMART MONEYSTOCKS

Buy the Dip – NSE Urges Kenyans to Pounce on Cheap Stocks

Share
Share

Nairobi Securities Exchange (NSE) Chairman Kiprono Kittony has encouraged Kenyan investors to take advantage of low prices at the stock market to expand their portfolios.

Kittony anticipated that the market would rebound allowing investors to enjoy hefty dividends.

“The market is trading at a price-to-earnings ratio of less than 10x. This presents a unique opportunity for investors to buy listed securities at attractive prices and enjoy capital gains when the market rebounds,” Kittony stated in an interview with KTN News on Tuesday, July 5.

The value of the bourse in May hit a 20-month low, primarily driven by a sell-off by foreign investors. Foreign investors have been fleeing frontier and emerging markets in a case of capital flight driven by various factors – including higher US interest rates.

The NSE has, however, rallied in the past week as local investors picked up cheap stocks following the sell-off by foreign investors. Blue chip stocks, which bore the brunt of the sell-off, have been the biggest gainers. Safaricom share value grew by Ksh136.2 billion within the week.

READ>>Airtel Kenya Appoints Louis Otieno As Chairman, Ashish Malhotra As MD

Investors gained a Ksh192 billion increase in paper wealth in just one week. EABL share value rose by Ksh23.3 billion while KCB gained Ksh10.4 billion.

Equity share value rose by Ksh15 billion as Co-operative bank gained Ksh1.1 billion.

Investors buying the dip are counting on enjoying large dividend payouts as the blue-chip firms remain profitable despite the sell-off by foreign investors. The drop in share prices has driven an increase in the dividend yield on stocks to a range of between 5.4 percent and 14.7 percent.

READ NEXT>>Sportpesa Axed as Govt Renews Only 3 Betting Licenses

Written by
MARTIN SIELE

Martin K.N Siele is the Content Lead at Business Today. He is also a Quartz contributor and a 2021 Baraza Media Lab-Fringe Graph Data Storytelling Fellow. Passionate about digital media, sports and entertainment, Siele also founded Loud.co.ke

Leave a comment

Leave a Reply

Your email address will not be published. Required fields are marked *

PAST ARTICLES AND INSIGHTS

Related Articles
CBK seeks KSh 60 billion in September for Budget Support
BUSINESS

CBK Seeks KSh60Bn for Budgetary Support in September Treasury Bonds Sale

CBK (Central Bank of Kenya) has published a prospectus inviting bidders to...

CIC Insurance Group Board Chairman Dr Nelson Kuria
BUSINESSFEATURED ARTICLE

CIC Insurance Group 2026 H1Net Profit Jumps 70.3% to KSh1.09Billion

CIC Insurance Group, a regional underwriter saw its net profit rise 70.3%...

NSE Chief Executive Officer Frank Mwiti
BUSINESS

NSE H12026 Net Profit Hits KSh736.9m On Market Activity Rebound

NSE(Nairobi Securities Exchange) Half-Year Net profits surged 386% to KSh 736.9 million...

CBK. Kenya's top monetary policy think tank
BUSINESS

CBK Survey: What Keeps Most Kenyan CEOs Awake at Night

A CBK (Central Bank of Kenya) survey undertaken in July lists concerns...