Wazua
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As long as CBR is 16%+, NSE will not see 3,500
Rank: Veteran Joined: 11/21/2006 Posts: 1,590
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From corporates who maintain overdrafts for working capital to the mama mboga who borrowed 10k from memba to take advantage of fresh greens plus the multiplier thereof, there an almost 10% decrease in disposal income or cash. That implies less consumption which will feed directly to bottomline aka profit. For the cash rich, a t-bill at 16% recalls the m01 days and putting cash in a skittish NSE is not the better alternative. For political reasons, I believe the governor may give us good news as early as Feb 2012 Sehemu ndio nyumba
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Rank: Chief Joined: 1/3/2007 Posts: 18,261 Location: Nairobi
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On the NSE, you can only invest in firms not the Index so it matters little where the index is at. Cash-rich firms is the place to be...! I need to start looking at the Balance Sheets of my investees... Since I have my preferred firms... Williamson - Negligible debt but lots of cash including 450mn from sale of 50% of Williamson House. Unga - Negligible debt but lots of cash including 350mn in Term Deposits. Kenol - Net cash positive AFTER the Inventories are netted against Current Liabilities but the Finance Costs will jump in 2011 which is not good for KK.I remain bullish coz my exit is in 2014-15 and at 20/- Greedy when others are fearful. Very fearful when others are greedy - to paraphrase Warren Buffett
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Rank: Elder Joined: 3/2/2007 Posts: 8,776 Location: Cameroon
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Interbank rates 26%. @mainat, I also dont see the CBR remaining up there at 16.5%. A whole lot of friends have shelved plans to take any loans/topups at those crazy rates. This also means no more construction for a vast majority, a net-selling effect at the NSE as cash is diverted. Shares chini. Plots chini. Houses chini. Nkt! TULIA.........UFUNZWE!
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Rank: Elder Joined: 3/2/2007 Posts: 8,776 Location: Cameroon
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Ssshh! Baclayloan rates will shift upwards on 1st Dec. They are still lending at the old rates. Any application made upto n including 30th Nov will be honoured. TULIA.........UFUNZWE!
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Rank: Member Joined: 9/9/2010 Posts: 546 Location: Garissa
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VituVingiSana wrote:On the NSE, you can only invest in firms not the Index so it matters little where the index is at.
Cash-rich firms is the place to be...!
I need to start looking at the Balance Sheets of my investees... Since I have my preferred firms...
Williamson - Negligible debt but lots of cash including 450mn from sale of 50% of Williamson House.
@ VVS...I thought the house was sold at 500 million? When you say sale of 50%, do you mean Williamson will continue owning 50% of the house which they may sell in the future at above 500 million? Come clean on this one cauze I respect your opinions on these threads. Wisdom to detect when share prices hit rock bottom.
When interest on bonds keep going up, you know the bear run is on high street. When interest on bonds start leveling, the bear has met the bull and they have hit rock bottom. When the interest rates on bonds start coming down, the bull has overpowered the bear and you better be riding the bull.
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Rank: Member Joined: 9/9/2010 Posts: 546 Location: Garissa
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Mainat wrote:From corporates who maintain overdrafts for working capital to the mama mboga who borrowed 10k from memba to take advantage of fresh greens plus the multiplier thereof, there an almost 10% decrease in disposal income or cash. That implies less consumption which will feed directly to bottomline aka profit.
For the cash rich, a t-bill at 16% recalls the m01 days and putting cash in a skittish NSE is not the better alternative.
For political reasons, I believe the governor may give us good news as early as Feb 2012 Do I need to say more? Wisdom to detect when share prices hit rock bottom.
When interest on bonds keep going up, you know the bear run is on high street. When interest on bonds start leveling, the bear has met the bull and they have hit rock bottom. When the interest rates on bonds start coming down, the bull has overpowered the bear and you better be riding the bull.
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Rank: Member Joined: 9/9/2010 Posts: 546 Location: Garissa
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VituVingiSana wrote:On the NSE, you can only invest in firms not the Index so it matters little where the index is at.
Cash-rich firms is the place to be...!
I need to start looking at the Balance Sheets of my investees... Since I have my preferred firms...
Williamson - Negligible debt but lots of cash including 450mn from sale of 50% of Williamson House.
Unga - Negligible debt but lots of cash including 350mn in Term Deposits.
Kenol - Net cash positive AFTER the Inventories are netted against Current Liabilities but the Finance Costs will jump in 2011 which is not good for KK.I remain bullish coz my exit is in 2014-15 and at 20/- From your posts, I can see you have hit 7003. Be careful as you are now hustling towards the grave where upon you will become an ancestor. Usually from being an elder, there is no other title apart from 'The Living Dead' where upon your death, you become an ancestor. How is that now? Wisdom to detect when share prices hit rock bottom.
When interest on bonds keep going up, you know the bear run is on high street. When interest on bonds start leveling, the bear has met the bull and they have hit rock bottom. When the interest rates on bonds start coming down, the bull has overpowered the bear and you better be riding the bull.
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Rank: Chief Joined: 1/3/2007 Posts: 18,261 Location: Nairobi
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Sure wrote:VituVingiSana wrote:On the NSE, you can only invest in firms not the Index so it matters little where the index is at.
Cash-rich firms is the place to be...!
I need to start looking at the Balance Sheets of my investees... Since I have my preferred firms...
Williamson - Negligible debt but lots of cash including 450mn from sale of 50% of Williamson House.
@ VVS...I thought the house was sold at 500 million? When you say sale of 50%, do you mean Williamson will continue owning 50% of the house which they may sell in the future at above 500 million? Come clean on this one cauze I respect your opinions on these threads. Williamson owned 50% of Williamson House. Since WH was valued/sold at 900mn (according to the Chairman during the AGM) then WTK's stake is 450mn. *** Let's assume WTK refused to distribute the cash & put it at 20% for 1 year = 90mn just in interest!*** Greedy when others are fearful. Very fearful when others are greedy - to paraphrase Warren Buffett
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Rank: Member Joined: 9/9/2010 Posts: 546 Location: Garissa
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VituVingiSana wrote:Sure wrote:VituVingiSana wrote:On the NSE, you can only invest in firms not the Index so it matters little where the index is at.
Cash-rich firms is the place to be...!
I need to start looking at the Balance Sheets of my investees... Since I have my preferred firms...
Williamson - Negligible debt but lots of cash including 450mn from sale of 50% of Williamson House.
@ VVS...I thought the house was sold at 500 million? When you say sale of 50%, do you mean Williamson will continue owning 50% of the house which they may sell in the future at above 500 million? Come clean on this one cauze I respect your opinions on these threads. Williamson owned 50% of Williamson House. Since WH was valued/sold at 900mn (according to the Chairman during the AGM) then WTK's stake is 450mn. *** Let's assume WTK refused to distribute the cash & put it at 20% for 1 year = 90mn just in interest!*** That is good info. Who was the other half owner of Williamson house? Wisdom to detect when share prices hit rock bottom.
When interest on bonds keep going up, you know the bear run is on high street. When interest on bonds start leveling, the bear has met the bull and they have hit rock bottom. When the interest rates on bonds start coming down, the bull has overpowered the bear and you better be riding the bull.
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Rank: Elder Joined: 9/25/2009 Posts: 4,534 Location: Windhoek/Nairobbery
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The market is never wrong, people's opinion are, so the market will prove us wrong/right.
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Rank: Veteran Joined: 6/17/2009 Posts: 1,622
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VituVingiSana wrote:Sure wrote:VituVingiSana wrote:On the NSE, you can only invest in firms not the Index so it matters little where the index is at.
Cash-rich firms is the place to be...!
I need to start looking at the Balance Sheets of my investees... Since I have my preferred firms...
Williamson - Negligible debt but lots of cash including 450mn from sale of 50% of Williamson House.
@ VVS...I thought the house was sold at 500 million? When you say sale of 50%, do you mean Williamson will continue owning 50% of the house which they may sell in the future at above 500 million? Come clean on this one cauze I respect your opinions on these threads. Williamson owned 50% of Williamson House. Since WH was valued/sold at 900mn (according to the Chairman during the AGM) then WTK's stake is 450mn. *** Let's assume WTK refused to distribute the cash & put it at 20% for 1 year = 90mn just in interest!*** And i do not think they are distributing.
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Rank: Elder Joined: 1/21/2010 Posts: 6,675 Location: Nairobi
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That would be way too much cash to hold on their balance sheet... Either management makes a specified investment or they must give the cash to shareholders.. Mark 12:29
Deuteronomy 4:16
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Rank: Chief Joined: 1/3/2007 Posts: 18,261 Location: Nairobi
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guru267 wrote:That would be way too much cash to hold on their balance sheet...
Either management makes a specified investment or they must give the cash to shareholders..
Cash is KING. Nothing like 'too much cash'. I think WTK should forgo the Special Dividend. Split the shares 10x & deposit the cash into a bank at 25% [banks are desperate!] Or buy IFB yielding 17% tax free! Yummy! Greedy when others are fearful. Very fearful when others are greedy - to paraphrase Warren Buffett
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Rank: Member Joined: 10/26/2008 Posts: 380
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Effect of high CBR, lower growth rate for the economy as a whole - from corporates to SMEs, growth is limited. The rationale being that enterprises need credit to expand and grow the business.
Also, many companies dealing in non-essential commodities will be hard hit, as consumers move away from the luxuries and concentrate on the basic needs - from a macro-economic view.
so Q4 2011 for many companies will not be rosy, thereby clouding results for FY 2011. I bet many companies will report Q4 figures less than those of Q3 in 2011 - i will be proven right in early 2012 when results are released.
In other words, fundamentals of many companies will be hit by the unfavourable macro-economic conditions at the moment;
Other factor: People will move capital from the NSE and put it in the T.Bills - therefore some capital flights from the NSE - i expect that prices will fall in the short term, at least by another 10%. compare prices from start of Nov 2011, and end of Dec 2011 - and the index will have fallen. You can be sure of that.
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Wazua
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As long as CBR is 16%+, NSE will not see 3,500
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