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Inflation rate for the month of July
Rank: Chief Joined: 5/31/2011 Posts: 5,121
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Impunity wrote:What formula is used to draw the inflation equation?
Is it absolute or generalistic formula? @impunity, a specific basket of goods that is used by a “typical consumer” is used in calculating inflation. Have a look at a guide here: http://www.knbs.or.ke/cpi/CPI%2...'%20GUIDE%202009.pdfAnd here for the detailed July 2012 inflation numbers: http://www.knbs.or.ke/cpi/cpi072012.pdf
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Rank: Chief Joined: 5/31/2011 Posts: 5,121
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hisah wrote:mwekez@ji wrote:hisah wrote:Lets forget about the tbills/bonds, CBR, lending rates etc fin jargon.
Say in Dec 2011 your shopping basket required 5,000. Lets assume the basket contents have remained constant till end of July. Is this 5,000 still enough to purchase the same contents through this 7 month window of inflation nosedive? Have you increased say more milk or bread, eggs, etc with that inflation rate slamdunk to 7.74% from 19.7%...?
Answer this honestly to yourself. Economics of the inflation The price of a basket of goods keeps going up year in year out unless a country is in deflation. Deflation is a negative inflation rate (below 0%) which is not desirable for a developing country like ours. Recently, the rate at which the price of a basket of good is rising has significantly declined. The inflation rate of 19.72% in Nov 2011 meant that the cost of a basket of goods was 19.72% more than in Nov 2010. The inflation rate of 7.74% in July 2012 means that the cost of a basket of goods is 7.74% more than in July 2011. It doesn’t mean that the cost of the basket of goods has declined. Truth be told, it’s good for us that the cost of a basket of goods has not gone up a whopping 19.7%. A low and stable inflation rate is what we need. So kudos that we have achieved a single digit inflation rate. Our short term target has been met That's why I call it ponzinomics...
Anyway, let them slash the CBR by 400bps, flood the banks with easy credit and lets us celebrate the economy has been healed. Hurray! Ponzinomics applys worldwide. …. Its time for our monetary easing and the economy to grow. Ride the wave brother
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Rank: Member Joined: 7/11/2008 Posts: 401
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hisah wrote:There's something that is not adding up with inflation and lending rates by CBK... If you look at the tbill rate behaviour it says otherwise about inflation nosediving...
I'm finding CBK and treasury moves very confusing and this needs to be resolved asap to jumpstart the econ. Expensive lending rates, expensive tbills, falling inflation rates... WTH... Someone is lying.
@ hisha are you saying that the T-bill is pegged to inflation so they move in tandem? Is the t-bill part of the basket of goods used to determine inflation? 
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Rank: Elder Joined: 1/21/2010 Posts: 6,675 Location: Nairobi
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hisah wrote:Lets forget about the tbills/bonds, CBR, lending rates etc fin jargon.
Say in Dec 2011 your shopping basket required 5,000. Lets assume the basket contents have remained constant till end of July. Is this 5,000 still enough to purchase the same contents through this 7 month window of inflation nosedive? Have you increased say more milk or bread, eggs, etc with that inflation rate slamdunk to 7.74% from 19.7%...?
Answer this honestly to yourself. @hisah I thought you knew better than this!! An inflation rate means prices are rising So i definitely cannot buy the same basket of goods that I could last month.. All I know is that I am paying 350 more on that 5k (7%) instead of paying 1000 more (20%) That sounds like healing to me... Even the price of soda went down... Mark 12:29
Deuteronomy 4:16
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Rank: Elder Joined: 12/4/2009 Posts: 10,702 Location: NAIROBI
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I am getting more units of prepaid power using the same amount of money compared to last year. Same case with petrol/fuel. Wealth is built through a relatively simple equation
Wealth=Income + Investments - Lifestyle
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Rank: Veteran Joined: 11/14/2006 Posts: 1,311
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The biggest risk to our inflation rate is the price of oil.
Apparently the world economy is contracting / or not growing as fast as the last few years....meaning the demand for oil will not be high...if all other factors remain the same (i.e. no Iran war, no other chaos like the last arab uprising,etc)
With low oil demand.... the oil price will fall or stabilize... and hence the imports for Kenya will not go through the roof again....thus Kenya shilling may also not lose value even after the TB rates fall.
with a stable currency, low inflation and low interest rates..... the economy will boom again, land & property prices will rise and the NSE will go through the roof..... and we will all be excited again....
I guess President Kibaki might hand over power circa March - June 2013 on a very high economic note.
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Rank: Elder Joined: 1/21/2010 Posts: 6,675 Location: Nairobi
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Finally my portfolio dividend yield exceeds the inflation rate!! SWEET!!   Mark 12:29
Deuteronomy 4:16
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Rank: Veteran Joined: 9/4/2009 Posts: 700 Location: Nairobi
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@hisah. But i'm curious that the stats aren't showing a slow down in inflation (i.e., declining rate of change, to use gurus illustration of 350 bob more on 5000k - 5350k - resulting in 7.74%) but is telling us that the actual basket has actually dropped over the last 4 months. So they're literally saying that in April 2012 we were at 5000k, but now at say 4700k. Perhaps that's what is hard to swallow. But how perceptive are you to changes in prices... depends on what you're buying??? Bread, Milk, Baby Formula, Sugar, etc. I'm still reminded that before we celebrate we must remember that Githae has big plans for the VAT Bill which might undo a lot of the good work. “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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Rank: Veteran Joined: 9/4/2009 Posts: 700 Location: Nairobi
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guru267 wrote:Finally my portfolio dividend yield exceeds the inflation rate!! SWEET!! I believe it was Hass who said rental yields are around 6.8% on certain apartments. So looks like by the end of the quarter, the landlord won't be adding anymore rent @guru267. What's the dividend yield on your portfolio? “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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Rank: Elder Joined: 1/21/2010 Posts: 6,675 Location: Nairobi
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Scubidu wrote:@guru267. What's the dividend yield on your portfolio? 6.9% trailing 8.5% forward Mark 12:29
Deuteronomy 4:16
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Rank: Veteran Joined: 9/4/2009 Posts: 700 Location: Nairobi
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guru267 wrote:Scubidu wrote:@guru267. What's the dividend yield on your portfolio? 6.9% trailing 8.5% forward Amazing yield... but you're trailing is similar to rental yields on an apartment in Nai. you should do a calculation to compound return with reinvested dividends, see what yield you get... btw if you're forward is higher it means you're expecting a significant decline in price... overvalued your portfolio? According to Hass website areas such State House and Athi have monthly rental income of 104kand 44k respective and their house price on average is 11.6m and 5.3m peracre. So if i buy an acre plot with a house for rent, it appears my yield would be around 10% p.a. right. You believe that? “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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Rank: Elder Joined: 1/21/2010 Posts: 6,675 Location: Nairobi
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Scubidu wrote:guru267 wrote:Scubidu wrote:@guru267. What's the dividend yield on your portfolio? 6.9% trailing 8.5% forward Amazing yield... but you're trailing is similar to rental yields on an apartment in Nai. you should do a calculation to compound return with reinvested dividends, see what yield you get... btw if you're forward is higher it means you're expecting a significant decline in price... overvalued your portfolio? My forward yield is higher because of the expected dividend increases from companies in 2012... If I factored in bonus issues and dividend reinvestment my yield comes to about 16% for 2012 Scubidu wrote: According to Hass website areas such State House and Athi have monthly rental income of 104kand 44k respective and their house price on average is 11.6m and 5.3m peracre. So if i buy an acre plot with a house for rent, it appears my yield would be around 10% p.a. right. You believe that? Have you factored in running costs of the house you rent out?? Issues the tenant might bring up like paint jobs, plumbing, wiring... Mark 12:29
Deuteronomy 4:16
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Rank: Veteran Joined: 11/11/2006 Posts: 972 Location: Home
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theman192000 wrote:hisah wrote:There's something that is not adding up with inflation and lending rates by CBK... If you look at the tbill rate behaviour it says otherwise about inflation nosediving...
I'm finding CBK and treasury moves very confusing and this needs to be resolved asap to jumpstart the econ. Expensive lending rates, expensive tbills, falling inflation rates... WTH... Someone is lying.
@ hisha are you saying that the T-bill is pegged to inflation so they move in tandem? Is the t-bill part of the basket of goods used to determine inflation? The weighted average yield on Kenya's 182-day Treasury bills fell for the first time in six weeks to 13.038 percent in an oversubscribed sale, from 13.379 percent last week, the central bank said on WednesdayThe T-bill rates now pointing south. http://af.reuters.com/article/k...ws/idAFN6E8G902R20120801
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Rank: Elder Joined: 1/21/2010 Posts: 6,675 Location: Nairobi
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holycow wrote:The weighted average yield on Kenya's 182-day Treasury bills fell for the first time in six weeks to 13.038 percent in an oversubscribed sale, from 13.379 percent last week, the central bank said on WednesdayThe T-bill rates now pointing south. http://af.reuters.com/article/k...ws/idAFN6E8G902R20120801 It has began!! Mark 12:29
Deuteronomy 4:16
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Rank: Chief Joined: 1/13/2011 Posts: 5,964
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I calculate dividend yield on my average net acquisition prices, unless I'm in the mkt buying.
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Rank: Veteran Joined: 9/4/2009 Posts: 700 Location: Nairobi
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guru267 wrote:Scubidu wrote:guru267 wrote:Scubidu wrote:@guru267. What's the dividend yield on your portfolio? 6.9% trailing 8.5% forward Amazing yield... but you're trailing is similar to rental yields on an apartment in Nai. you should do a calculation to compound return with reinvested dividends, see what yield you get... btw if you're forward is higher it means you're expecting a significant decline in price... overvalued your portfolio? My forward yield is higher because of the expected dividend increases from companies in 2012... If I factored in bonus issues and dividend reinvestment my yield comes to about 16% for 2012 Scubidu wrote: According to Hass website areas such State House and Athi have monthly rental income of 104kand 44k respective and their house price on average is 11.6m and 5.3m peracre. So if i buy an acre plot with a house for rent, it appears my yield would be around 10% p.a. right. You believe that? Have you factored in running costs of the house you rent out?? Issues the tenant might bring up like paint jobs, plumbing, wiring... Nope I haven't. Wonder what % that would shave off annually. There used to be a theory that when inflation and interest rates lower companies usually reduce their dividend payout (no real evidence though). Btw 16% would be a very super high return. “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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Rank: Elder Joined: 7/11/2010 Posts: 5,040
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Something doesn't add up. Inflation was very high last year, interest rates were high.(i know fuel prices played a role, but....) Looking at other pre-election periods, was this the trend. i imagine the events should be occurring this year and stabilize next year after dust settles. I do not believe GOVA, i think we have been played and the game is continuing. Cash for elections has/is being squeezed out. The investor's chief problem - and even his worst enemy - is likely to be himself
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Rank: Veteran Joined: 11/14/2006 Posts: 1,311
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Aguytrying wrote:Something doesn't add up. Inflation was very high last year, interest rates were high.(i know fuel prices played a role, but....)
Looking at other pre-election periods, was this the trend. i imagine the events should be occurring this year and stabilize next year after dust settles.
I do not believe GOVA, i think we have been played and the game is continuing. Cash for elections has/is being squeezed out. What doesn't add up?....in English please!!
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Rank: Elder Joined: 7/11/2010 Posts: 5,040
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Liv wrote:Aguytrying wrote:Something doesn't add up. Inflation was very high last year, interest rates were high.(i know fuel prices played a role, but....)
Looking at other pre-election periods, was this the trend. i imagine the events should be occurring this year and stabilize next year after dust settles.
I do not believe GOVA, i think we have been played and the game is continuing. Cash for elections has/is being squeezed out. What doesn't add up?....in English please!! I think the government is manipulating inflation, t/bills, Ksh-USD and interest rates since last year for its own ends. I think they will do it again this year or early next year. The investor's chief problem - and even his worst enemy - is likely to be himself
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Rank: Veteran Joined: 11/14/2006 Posts: 1,311
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Aguytrying wrote:Liv wrote:Aguytrying wrote:Something doesn't add up. Inflation was very high last year, interest rates were high.(i know fuel prices played a role, but....)
Looking at other pre-election periods, was this the trend. i imagine the events should be occurring this year and stabilize next year after dust settles.
I do not believe GOVA, i think we have been played and the game is continuing. Cash for elections has/is being squeezed out. What doesn't add up?....in English please!! I think the government is manipulating inflation, t/bills, Ksh-USD and interest rates since last year for its own ends. I think they will do it again this year or early next year. Do you think there are major factors beyond the control of government that affect inflation and exchange rates?
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