Profitability of operating cash flow based trading strategy at the Nairobi stock exchange

Abstract

This study was meant to establish whether a cashflow based investment strategy can yield significantly better returns than the general market performance, as represented by the NSE index. Financial reports were obtained from the CMA library for the years 2000 to 2005. NSE Index figures were obtained from the stock exchange information desk. Form the data extracted, various analysis were conducted; regression and comparisons between cashflows, accruals, market returns NSE index as well as price premiums. The results showed that there IS significant returns from a cashflow based portfolio building strategy.