An excellent chance to reenter and diversify their portfolios across several market divisions is presented by the Nairobi Securities Exchange’s value degradation.
Market analysts claim that the bourse’s 2023 volatility offers a special chance for institutional and retail investors to profit from lower share prices in the market before to the anticipated bull run.
“Looking broadly down, Kenya is the cheapest it has ever been on the data we have, which goes back 15 years, it is three standard deviations away from its average, which is extreme so that’s almost like a black swan type of event, and when you compare the key to its peers and not just African peers Kenya performed extremely badly, there is a lot of value, there’s a lot of value in Kenya,” said Muathi Kilonzo the Head of Equities Kenya, EFG Hermes.
But with most counters performing almost the same, where should investors look?
Market specialists predict that 2024 would be a good year to invest in agriculture, since financial counters should strengthen and recover.
The telco behemoth is expected to make a respectable profit from Safaricom’s debut into the Ethiopian market.
“I’m looking at pockets of opportunity in the banking sector, especially the Equity Group, we are also bullish On NCBA group and I&M because of their strong value proposition on the agricultural front we are very optimistic on Kapchorwa and Williamson Tea because of their earnings are growing strong, in triple digits. In the insurance front, we like CIC as well as Jubilee, we like the exposure to long-term insurance and Jubilee has leadership in the medical front which we think will tailwind profitability, on the construction side we are bullish on Bamburi,” says Ronny Chokaa Senior Research Analyst – Aib-Axys.
The head of Equities Kenya at EFG Hermes, Mr. Muathi Kilonzo, commented, “Safaricom is interesting because they are demystifying Ethiopia and they are taking investors to Ethiopia in February.” The management is reportedly making a lot of efforts to educate people about one of the best pricing in the world because they are also hosting an update call in January. There are very few telco markets worldwide where more than 100 million people still use 2G.
With a market capitalization that fluctuated from a high of Ksh.64.8 billion in March due to the Diageo Tender Offer to lows of Ksh.6.6 billion turnover as of December, the Nairobi Stock Exchange saw considerable volatility in 2023.
