Even if the financial sector reports super results, this has already been priced in by the rejection of the NSE index at 4700pt level. Resistance in the short term is now between 4600 - 4700 zone, which happens to project a double top. The fudged inflation index is above 5% which is the CBK's upper limit, yet MPC lowered the CBR to 5.75% - quite senseless!? Global food inflation is picking up, oil inflation due to middle east civil unrest, possibility of a drought and political risks as we approach 2012 are presenting bullish barriers.

This yearly chart portrays a head and shoulders pattern which likely suggests that in coming weeks NSE will reach 4000 points if 4200 support does not hold. If 4000 support does not hold, it will be time to turn defensive and look for cheap attractive blue chip counters.
Personally I started getting uncomfortable by the lack of volume in the last quarter of 2010 as the market rallied to 4700.

KCB has a nasty habit of negative surprises every 2 years!

Let's hope they have made huge recoveries in Uchumi & Triton...

No. It is an opportunity to own quality stocks at cheaper prices. Some quality stocks have P/E ratios which are way too high. If nse breaks below 4000 that's the time to bargain hunt. Maybe VVS will get safcom @3.50 then. But I want it lower @3. Money is made as the quality bargains keep getting cheaper. A fat-tail situation where the market under prices the stocks despite rosy fundamentals. Blue chips benefit the most when the market re-prices the undervaluation in the next bullish turn.

....and unfortunately not aboard KQ.