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youcan'tstopusnow
#31 Posted : Thursday, January 05, 2012 12:44:55 PM
Rank: Chief

Joined: 3/24/2010
Posts: 6,779
Location: Black Africa
KiFagio wrote:
GGK wrote:
This is one of those threads that I can't contribute. But it is enlightening all the same.

@GGK U R better off! Its all Martian to me. Pls tell me in simple language, what this lingo/jargon means. And how come only 3 wazuans R contributing? Where R the rest? QW??

Laughing out loudly Laughing out loudly Laughing out loudly
Kumbe siko peke yangu. This sounds like language ya watu wa CFA
GOD BLESS YOUR LIFE
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emlyn ngwiri
#32 Posted : Monday, January 09, 2012 6:39:26 PM
Rank: Member

Joined: 8/12/2010
Posts: 129
Location: nairobi
@scubidu how would mispricing of securities arise yet the we are "semi strong" form efficient?

The yield curve also acts as benchmark for the pricing of other / future security issues. How then can mispricing occur if the Yield curve is derived from weighted average of interest rates of different T/bonds (from the secondary mkt) and T/bills?

rgds
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Ceinz
#33 Posted : Monday, January 09, 2012 7:19:31 PM
Rank: Veteran

Joined: 5/7/2009
Posts: 1,032
Location: Sea of Transquility
youcan'tstopusnow wrote:
KiFagio wrote:
GGK wrote:
This is one of those threads that I can't contribute. But it is enlightening all the same.

@GGK U R better off! Its all Martian to me. Pls tell me in simple language, what this lingo/jargon means. And how come only 3 wazuans R contributing? Where R the rest? QW??

Laughing out loudly Laughing out loudly Laughing out loudly
Kumbe siko peke yangu. This sounds like language ya watu wa CFA


Separating the mboys from river-road speculators.d'oh!
“small step for man”
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GGK
#34 Posted : Monday, January 09, 2012 8:06:41 PM
Rank: Member

Joined: 11/21/2006
Posts: 608
Location: Ruiru
Ceinz wrote:
youcan'tstopusnow wrote:
KiFagio wrote:
GGK wrote:
This is one of those threads that I can't contribute. But it is enlightening all the same.

@GGK U R better off! Its all Martian to me. Pls tell me in simple language, what this lingo/jargon means. And how come only 3 wazuans R contributing? Where R the rest? QW??

Laughing out loudly Laughing out loudly Laughing out loudly
Kumbe siko peke yangu. This sounds like language ya watu wa CFA


Separating the mboys from river-road speculators.d'oh!


Someone is doing an MBA research here. Wazua on another level. Sisi tumezoea hesabu ya mashinani
"..I am because we are. "― Ubuntu, Umtu,
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Scubidu
#35 Posted : Tuesday, January 10, 2012 8:55:38 AM
Rank: Veteran

Joined: 9/4/2009
Posts: 700
Location: Nairobi
emlyn ngwiri wrote:
@scubidu how would mispricing of securities arise yet the we are "semi strong" form efficient?

The yield curve also acts as benchmark for the pricing of other / future security issues. How then can mispricing occur if the Yield curve is derived from weighted average of interest rates of different T/bonds (from the secondary mkt) and T/bills?

rgds


@emlyn. The yield curve does act as a benchmark. However, if you look at the debates pipo have on wazua on inflation, ccys, economic data, everyone has so many differing opinions. Macro information is not easily accessible and CBK doesn't make pricing of it's auctions transparent. We have a poor information curve.

NSE bond mart is OTC, it's not efficient at all esp when the exchange tells us that 70% of pricing on the market is 'off market' (what they think is 'on' or 'off' market is another debate). ive not seen bid/ask on nellydata, so I assume there must be many arbitrage opps due to peeps using their own pricing curves.

This should interest you:

http://www.vanguardngr.c...s-first-ever-bond-index/
“We are the middle children of history man, no purpose or place. We have no great war, no great depression. Our great war is a spiritual war, our great depression is our lives!" – Tyler Durden
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emlyn ngwiri
#36 Posted : Tuesday, January 10, 2012 9:39:56 AM
Rank: Member

Joined: 8/12/2010
Posts: 129
Location: nairobi
@scubidu

riskless arbitrage? really?
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Scubidu
#37 Posted : Tuesday, January 10, 2012 12:14:45 PM
Rank: Veteran

Joined: 9/4/2009
Posts: 700
Location: Nairobi
@emlyn. did i say riskless arbitrage? talk to ur local broker and ask them the average bid/ask spread on a Kenyan infrastructure bond.
“We are the middle children of history man, no purpose or place. We have no great war, no great depression. Our great war is a spiritual war, our great depression is our lives!" – Tyler Durden
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emlyn ngwiri
#38 Posted : Tuesday, January 10, 2012 2:13:12 PM
Rank: Member

Joined: 8/12/2010
Posts: 129
Location: nairobi
@scubidu

I say risk less because of the short time frame involved between buying and selling the asset. if risk-less arbitrage occurs without investment there is no rate of return or anything like it because the asset is immediately sold. One simply makes a profit on the deal.

Does my view hold? or maybe i am seeing the coin differently, kindly elaborate

rgds
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Scubidu
#39 Posted : Tuesday, January 10, 2012 3:13:54 PM
Rank: Veteran

Joined: 9/4/2009
Posts: 700
Location: Nairobi
emlyn ngwiri wrote:
@scubidu

I say risk less because of the short time frame involved between buying and selling the asset. if risk-less arbitrage occurs without investment there is no rate of return or anything like it because the asset is immediately sold. One simply makes a profit on the deal.

Does my view hold? or maybe i am seeing the coin differently, kindly elaborate

rgds


I do not follow. The time frame has something to do with the arbitrage (it's OTC market... not that fast). Perhaps you can give me an example?
“We are the middle children of history man, no purpose or place. We have no great war, no great depression. Our great war is a spiritual war, our great depression is our lives!" – Tyler Durden
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emlyn ngwiri
#40 Posted : Tuesday, January 10, 2012 5:53:04 PM
Rank: Member

Joined: 8/12/2010
Posts: 129
Location: nairobi
what i mean is arbitrage is sustained only for a short period before the forces of demand and supply regularise the situation.

Assume that a stock is trading in two markets simultaneously Kenya and Uganda. Suppose the stock is trading at kes 100 in the Ugandan market and kesh 98/- in Kenya. We simply buy a share for kesh 98 in Kenya and immediately sell it for kesh 100 in Uganda. We make an easy kes 2 at no risk and we did not have to put up any funds of our own. The sale of the stock at kesh 100 was more than adequate to finance the purchase of the stock at kesh 98.

hope im not too off

rgds
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