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CBK MPC Meet!!!
Rank: Chief Joined: 5/31/2011 Posts: 5,121
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Rank: Chief Joined: 5/31/2011 Posts: 5,121
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MPC Meeting scheduled for 5th Sept. A good rate cut is in order. 400 bps won’t surprise
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Rank: Elder Joined: 9/23/2010 Posts: 2,221 Location: Sundowner,Amboseli
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mwekez@ji wrote:MPC Meeting scheduled for 5th Sept. A good rate cut is in order. 400 bps won’t surprise And the stocks will respond upwards! @SufficientlyP
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Rank: Chief Joined: 8/4/2010 Posts: 8,977
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This crude oil thing is not looking cool... The rebound since July is in coils, which means it may surpass the 2012 highs in coming weeks. FAO food index is also flashing red on food prices... Will MPC maintain CBR at 16.5%? Likely. Credit squeeze to continue  $15/barrel oil... The commodities lehman moment arrives as well as Sovereign debt volcano!
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Rank: Elder Joined: 1/21/2010 Posts: 6,675 Location: Nairobi
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Rank: Chief Joined: 8/4/2010 Posts: 8,977
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Dont forget ERC's caveat after announcing fuel prices the other day. The fuel price cut party is almost done! Oil inflation is a headache to any oil importing nation.
Watch out for crude oil prices... $15/barrel oil... The commodities lehman moment arrives as well as Sovereign debt volcano!
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Rank: Chief Joined: 1/13/2011 Posts: 5,964
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With the proposed VAT hikes averted, food, external forex funding & hydro. That's enough room for a deep cut.
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Rank: Chief Joined: 8/4/2010 Posts: 8,977
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Cde Monomotapa wrote:With the proposed VAT hikes averted, food, external forex funding & hydro. That's enough room for a deep cut. A 300 - 400bps cbr cut would be welcome. Will they do it? Tbill yields need to be sunk to force deeper cuts.
Btw anyone noticed equity market volume is drying up like in Aug 2010... $15/barrel oil... The commodities lehman moment arrives as well as Sovereign debt volcano!
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Rank: Chief Joined: 1/13/2011 Posts: 5,964
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hisah wrote:Cde Monomotapa wrote:With the proposed VAT hikes averted, food, external forex funding & hydro. That's enough room for a deep cut. A 300 - 400bps cbr cut would be welcome. Will they do it? Tbill yields need to be sunk to force deeper cuts.
Btw anyone noticed equity market volume is drying up like in Aug 2010... I thought we'd lose the KES like the UGX after last MPC but CBK has been on top of things via OMO & I figure last year's policy reforms are feeding through now. Kudos. Let's see what happens. I've noted the dry up too. It's like the large buy-side investors packed in & are now fully loaded. Personally, I'm looking for policy direction/stance from the MPC to know whether we can kick the index over 4,200 ASAP.
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Rank: Chief Joined: 1/13/2011 Posts: 5,964
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August 2010? I recall well  Scan bankrolled a lot of the KCB I have now. Let's play
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Rank: Chief Joined: 8/4/2010 Posts: 8,977
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Tbill 91 day rate smacked down by 86.4bps. Hmmm... CBR rate cut signal...  $15/barrel oil... The commodities lehman moment arrives as well as Sovereign debt volcano!
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Rank: Chief Joined: 8/4/2010 Posts: 8,977
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Last week Tbill 91 day rate slid by 86.4bps. This week the rate has slumped by 168.4bps! This has pushed the yield below the 2012 low to stand at 8.583%. The spread between CBR and the 3 tbill classes is now too wide and most likely with inflation now below 9% threshold should make CBK confident enough to cut CBR. Looking at the 91 day yield smackdown, finally CBK is sending strong signals to tbill hoarders that its time to jump off the ship... The bills are no longer offering attractive inflation beating spreads. Most likely a 300bps CBR cut will be favoured. The higher the better to inject more liquidity in the econ which will also bang down those 20s% high lending rates. And as @guru has said, counters with high dividend yields will definitely rally. @deal - seems Volcker's play book was modified just slightly by CBK... I still see NSE testing 4000 * 4200 before the year ends as the final upthrust. Were 2013 without elections then 4400 would be the target for 2012 assuming CBR is cut by 300bps or more. I don't like the idea of the election in March 2013 when majority of the firms are announcing full year results. On the flip side if elections are smooth sailing then the delayed momentum between Dec and March will be quickly spring up in April. Looks like March 2009 repeat. Notable party spoiler - euroland debt bomb... Keep an eye on it.  $15/barrel oil... The commodities lehman moment arrives as well as Sovereign debt volcano!
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Rank: Elder Joined: 9/23/2010 Posts: 2,221 Location: Sundowner,Amboseli
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Good points @Hisah. The Prof truly setting the stage for a 400bps smackdown And even then,it would still be high. It should be close to the level of inflation,max 10% & nothing more. I would suggest he strangles it by 700bps to 9.50%. Then we can sell simba at 29bob,mpesa at 5bob and go watch the wildebeest migration at the mara @SufficientlyP
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Rank: Chief Joined: 5/31/2011 Posts: 5,121
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Rank: Elder Joined: 9/23/2010 Posts: 2,221 Location: Sundowner,Amboseli
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There's going to be a stampede akin to the wildebeest migration from Money mkt to Equities .....All roads lead to......... @SufficientlyP
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Rank: Elder Joined: 9/23/2010 Posts: 2,221 Location: Sundowner,Amboseli
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Sufficiently Philanga....thropic wrote:hisah wrote:But when CBR is lowered 600bps in one move, just buy stocks even paka?! I have a feeling they will pull this stunt in H2, hold it there for like 3 months,& then.....ofcourse raise it back to 17.999% .By this time some folks will be smiling all the way to the bank. Enough money will have been made for the elections Title of the movie.."Only in Kenya" @SufficientlyP
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Rank: Chief Joined: 5/31/2011 Posts: 5,121
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Our norm should be: 91 days tbill at sub 5%, Average deposit rate at c5%, Average lending rate at c15%. See: Chart 2D: Trends In Interest Rates http://www.centralbank.go.ke/do...r/2012/MerMay%202012.pdfMay we get there.
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Rank: Member Joined: 8/17/2011 Posts: 207 Location: humu humu
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 Sufficiently Philanga....thropic wrote:There's going to be a stampede akin to the wildebeest migration from Money mkt to Equities .....All roads lead to......... Real estate is also competing for the same funds
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Rank: Member Joined: 2/8/2007 Posts: 808
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at 5% rates, The 1 USD to KES will be 100/=. You surely don't want us to get there do you?
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Rank: Chief Joined: 5/31/2011 Posts: 5,121
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Kausha wrote:at 5% rates, The 1 USD to KES will be 100/=. You surely don't want us to get there do you? We were at sub 5% and KES was well seated at c80/-. Why not again? That asked, I would not mind a c90/- for the sake of the much desired monetary easing
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CBK MPC Meet!!!
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