Stocks to snap amid low prices
Despite the Nairobi Securities Exchange (NSE) having taken a beating in recent times, experts in the sector say it is the right time to invest in stocks, and reap when prices rise.
Kenyans have hence been urged to take advantage of the cheap stocks by purchasing certain counters in order to benefit when the economy recovers.
For those who have already invested int share, the NSE Chairman Kiprono Kittony has urged them to take advantage of the low prices currently at the stock market to expand their portfolios.
“The market is trading at a price-to-earnings ratio of less than 10 times. This presents a unique opportunity for investors to buy listed securities at attractive prices and enjoy capital gains when the market rebounds,” Kittony said on KTN TV.
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.
Stocks analysts have asked local investors to bet on counters such as Safaricom, East African breweries, Equity Bank among others saying that they are currently undervalued.
“We opine that the foreign sell off on companies such as Safaricom offers an entry point for local investors. Against our target price of Sh45.00, the stock presents a potential of gain of 80 per cent,” said Gengis Capital in an investor briefing.
Other stocks that have been proposed include I&M Bank, Cooperative Bank, KCB, Absa, Stanchart and Bamburi.
“I smell opportunity on the Nairobi bourse. Foreign investor activity dropped to record-low in March. When other foreign investors dumped Tanzanian stocks 2018-2021, I was buying selected companies with both hands. Getting ready to do the same in Kenya. Buy cheaply. Then wait,” said Tim Staermose of African Lions Fund.
“What ails many investors isn’t lack of knowledge of what stocks to buy. Kenya’s blue chip stocks have always remained BAT, EABL SCOM, some banks. They are enviable dividend and value kings,” said Cheruiyot Tikobi of Stealth Portfolio Management.