Still within rebound range 3000 - 3500 for the index. Nothing new though KCB has rallied much more than my expectation for bank stocks. Some feel good effect has also come from that oil announcement.
Techs aside, macro-econ picture is not looking good and CBK is doing all they can to try and hold out as long as they can. Cant say the same about Treasury, seems like a confused lot. I'm not comfy with that 7% syndicate loan from foreign banks. I cant see USDKES staying below 95 for long unless KES fx becomes a fixed regime. That USD rate uptick will not be good for that loan. Sigh. I have said before it can rain all year, but as long as oil cannot be printed and at lower prices, this will give the econ growth tough challenges. Externally the eurozone LTRO only managed to restore some liquidity. These days trillions of euros or USD cannot hold markets for more than a year?! KE does a lot of export biz with euroland. Need I say more on balance of payments, current account deficits etc.
- High CBR
- High treasury paper rates
- High inflation - cant control oil prices. Power bills, transport, goods, consumer purchase power, wages dilution (wages inflation looms) etc
- USDKES - price fixing. For how long unless CBK prints USD?! BOP, national debt, current account deficit etc
- Finance bill - interest rate cap catfight - a hell for banks.
- Eurozone debt bomb - Spain, Italy. Portugal, expect news very soon.
Yep, a lot of curve balls out there with very minimal immediate control from treasury.
$15/barrel oil... The commodities lehman moment arrives as well as Sovereign debt volcano!