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SAFARICOM leads the way for NSE trend

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Liv		#1 Posted : Thursday, March 31, 2011 11:01:57 AM
Rank: Veteran Joined: 11/14/2006 Posts: 1,311		From my analysis (not scientific) SAFCOM has been leading the downward trend for NSE. When this share price dropped from sh 5.00 to 4.30-4.50 the other shares held for sometime before they started dropping.... following the lead from SAFCOM. This happened again when SAFCOM price dropped to sh 3.90 - 4.00 area. After a number of days the other shares also started to drop. In the last 2 days the SAFCOM price has broken the sh 3.90- 4.00 support level. The price is circa 3.80 now. If this hypothesis holds.... I expect to see a further drop of most shares across the board at NSE.... resulting in a further drop of the NSE index.... especially if the price drops further below 3.80. Having said that.... I am not sure the same is true when SAFCOM price rises. Does the NSE index lead SAFCOM up or SAFCOM leads NSE Index upwards as well?...time will tell. Someone can do a formal study on this.... where are those people doing MBA projects?... Does this sound a good proposal for your thesis?
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ProverB		#2 Posted : Thursday, March 31, 2011 11:15:21 AM
Rank: Veteran Joined: 3/12/2010 Posts: 1,199 Location: Eastlander		@liv ??? 29.6Million shares traded yesterday..of this Safaricom shares were about 22Million... translating to MORE THAN 74% of all volume traded!! ..si that automatically implies that overall trend of the market will be weighted toward safcom?? ..u don't need to be an analyst or write up a thesis to prove that. ..better still.. here lies entire thesis.. in any stock market whose Index is based on volume weighted average pricing..the most traded counters will determine overall market trend..of these most traded, the index will give a bias to the counter with the largest volume of shares traded.. where such counter controls over 60 % volumes traded..the index will without fail reflect that counter..whether trend be positive..or negative. ..Let your light so shine before men, that they may see your good works, and glorify your Father which is in heaven...Matt5:16 - 1769 Oxford King James Bible 'Authorized Version
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Liv		#3 Posted : Friday, April 01, 2011 1:24:52 AM
Rank: Veteran Joined: 11/14/2006 Posts: 1,311		@proverB, Thanks for your comments. You are right Safcom influences the direction of the NSE index due to the volumes. However my point is that the direction of other individual stocks follow this trend eventually. e.g. Coop fell from sh 20+ to circa 17 after posting excellent results. This also happened to BBK, equitybank and others. I guess the market was bearish after the influence of safcom. But the individual stock prices eventually followed the downward trend.... though the good results should have influenced the these individual stocks to move in the opposite direction.
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Cde Monomotapa		#4 Posted : Friday, April 01, 2011 4:16:02 AM
Rank: Chief Joined: 1/13/2011 Posts: 5,964		Well, it better stop soon especially now that its fortunes have moved from bad to worse. The rest of the better Co.s shouldn't be held captive. Infact! Ikiwa delisted ni sawa...ok.ok.ok..pulled out the 20 index. Lol!
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youcan'tstopusnow		#5 Posted : Friday, April 01, 2011 9:20:57 AM
Rank: Chief Joined: 3/24/2010 Posts: 6,779 Location: Black Africa		Liv, BBK hit almost 70. Equity and Coop share prices had already factored in those ''excellent results''. Why do you think KCB did not fall? Because the results were surprising to most. In fact Coop posted less than expected growth from the 3rd quarter. Some knew the behaviour of banks after results and sold before the announcements. The depressed NSE has nothing to do with Safaricom but with the environment i.e. inflation, Libya, oil, Hague, Another GFC?, etc. Kila counter ibebe msalaba wake GOD BLESS YOUR LIFE
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mwanahisa		#6 Posted : Friday, April 01, 2011 11:08:13 AM
Rank: Elder Joined: 6/2/2008 Posts: 1,438		Quite right but note that the NSE index has no turnover weighting. The emphasis is on price. ProverB wrote: @liv ??? 29.6Million shares traded yesterday..of this Safaricom shares were about 22Million... translating to MORE THAN 74% of all volume traded!! ..si that automatically implies that overall trend of the market will be weighted toward safcom?? ..u don't need to be an analyst or write up a thesis to prove that. ..better still.. here lies entire thesis.. in any stock market whose Index is based on volume weighted average pricing..the most traded counters will determine overall market trend..of these most traded, the index will give a bias to the counter with the largest volume of shares traded.. where such counter controls over 60 % volumes traded..the index will without fail reflect that counter..whether trend be positive..or negative.
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Liv		#7 Posted : Friday, April 01, 2011 11:24:24 AM
Rank: Veteran Joined: 11/14/2006 Posts: 1,311		youcan'tstopusnow wrote: Liv, BBK hit almost 70. Equity and Coop share prices had already factored in those ''excellent results''. Why do you think KCB did not fall? Because the results were surprising to most. In fact Coop posted less than expected growth from the 3rd quarter. Some knew the behaviour of banks after results and sold before the announcements. The depressed NSE has nothing to do with Safaricom but with the environment i.e. inflation, Libya, oil, Hague, Another GFC?, etc. Kila counter ibebe msalaba wake @youcan'tstopusnow, This is hilarious !!! My hypothesis is that.... SAFCOM is more sensitive to the effect of the factors you have mentioned above (inflation, libya, oil, hague,etc) and therefore gets affected faster before the other counters. If this hypothesis is true.... then any time there are adverse factors that are going to affect the market... the effect will be more sensitive to SAFCOM and its price will go first.... before the effect reaches other counters. If this is true it will be like "ukiona kichwa cha SAFCOM kimenyolewa...tia cha hawa wengine maji".... does it make sense? I still hold the view that this is a good subject for an MBA thesis.
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youcan'tstopusnow		#8 Posted : Friday, April 01, 2011 5:34:38 PM
Rank: Chief Joined: 3/24/2010 Posts: 6,779 Location: Black Africa		Liv wrote: "ukiona kichwa cha SAFCOM kimenyolewa...tia cha hawa wengine maji".... GOD BLESS YOUR LIFE
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youcan'tstopusnow		#9 Posted : Friday, April 01, 2011 5:38:31 PM
Rank: Chief Joined: 3/24/2010 Posts: 6,779 Location: Black Africa		Liv wrote: "ukiona kichwa cha SAFCOM kimenyolewa...tia cha hawa wengine maji".... GOD BLESS YOUR LIFE
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