A majority of listed banks in Kenya remain undervalued by investors in the stock market relative to their net asset value, despite reporting record profits in a tough economy, which has eroded most companies’ valuations and profitability.
Analysis of lenders’ price-to-book valuations –which indicates the value that market participants attach to a company’s shares relative to its net assets— shows that nine out of 12 have a P/B ratio of less than one, effectively rendering them undervalued by this metric.
