Diamond Trust Bank Kenya Ltd. (DTKL), a Nairobi-based lender with operations in Uganda, Tanzania and Burundi, slumped the most in six weeks as technical indicators signalled to some investors the stock was overvalued.
Shares in DTB, as the bank is known, fell 3 percent to 130 shillings by 2:18 p.m. in Kenya’s capital, the steepest decline since Dec. 10. More than seven times the three-month daily average volume of shares changed hands, according to data compiled by Bloomberg.
DTB’s shares had gained 20 percent from the beginning of the year until Jan. 18 before a four-day losing streak began Jan. 19. The stock’s relative strength index closed at 80.9 on Jan. 18; a reading above 70 signals to technical analysts that a security is overvalued and will probably fall.
“There is a price correction on the stock after the gains,” Eric Munywoki, a research analyst at Nairobi-based Old Mutual Securities Ltd., said by phone today.
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