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Kenya Economy Watch
Rank: Chief Joined: 8/4/2010 Posts: 8,977
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KE econ signals are so mixed up at the moment, nothing makes sense... - Liquidity is high - credit expansion ahead of MPC target 7 months in a row - Somehow inflation is 'contained'... - KES already weakening in 2014 - NSE has been flat in 2014 - GDP growth dismal with all that liquidity with agri, tourism & industrials crimped and more crimping is slated for 2014. - 1.8 trillion budget estimate Is liquidity being misallocated and where to? That credit expansion will force CBK to step in at some point. Will they hike CBR or hike CRR for banks or both? At 1.8T budget with the high credit expansion and a squeaking econ, inflation will definitely spike soon. So what exactly is treasury up to with a number of KE econ flight gauges reading out of sync...? Bumpy flight this one as equities and money market fight it out... And so I hold my bear bias on financials even if Mr market thinks otherwise. Reality eventually meets mr market's irrational spree. http://www.businessdaily.../-/85j1nxz/-/index.html
$15/barrel oil... The commodities lehman moment arrives as well as Sovereign debt volcano!
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Rank: Member Joined: 8/16/2012 Posts: 660
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Live and learn; and don’t forget, nothing ventured, nothing gained.
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Rank: Chief Joined: 8/4/2010 Posts: 8,977
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Energy sector. The next hot bed... $15/barrel oil... The commodities lehman moment arrives as well as Sovereign debt volcano!
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Rank: Elder Joined: 2/26/2012 Posts: 15,980
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hisah wrote:Energy sector. The next hot bed...
Been eyeing KEGN with more power coming in. I think i'll load at 10.xy its heading there "There are only two emotions in the market, hope & fear. The problem is you hope when you should fear & fear when you should hope: - Jesse Livermore
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Rank: Veteran Joined: 11/21/2006 Posts: 1,590
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Muchr-as long as you remember there is a rights issue coming Sehemu ndio nyumba
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Rank: Elder Joined: 2/26/2012 Posts: 15,980
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Mainat wrote:Muchr-as long as you remember there is a rights issue coming I do....and i also fear that it might just not happen. With everything looking gloomy..tourism, drought poor weather forecasts, things might not end up good this year. "There are only two emotions in the market, hope & fear. The problem is you hope when you should fear & fear when you should hope: - Jesse Livermore
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Rank: Chief Joined: 8/4/2010 Posts: 8,977
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As a continuation from here - http://www.wazua.co.ke/f...amp;m=554238#post554238
Substandard also has an article about the same, but discussed in more detail - http://bit.ly/RI32bY
Quote:Could the economy be in financial distress? This is the big question among economists after the Government moved to reschedule a $600 million (Sh52.2 billion) syndicated loan. The National Treasury received a three-month extension on the commercial debt after its debut $2 billion (Sh174 billion) Eurobond was delayed.
“What we have done is just extend the repayment... by another three months as we continue discussions on the sovereign bond,” Kamau Thugge, the National Treasury’s principal secretary, told Reuters.
The country secured a two-year loan at an interest rate of seven per cent in 2012 to fund development. Underwritten by Citigroup, Standard Chartered Bank (UK) and Standard Bank of South Africa, the loan was due for full repayment on May 16.
National Treasury Cabinet Secretary Henry Rotich said terms and conditions of the loan remain the same as before, but extension attracted a fee which is usually charged in line with normal practice. He however, declined to give more details.
Economists, however, said the request for the extension of the repayment period is a signal of an economy that is under financial duress.
If indeed this financial distress is present another fat tail episode is coming up in equities... $15/barrel oil... The commodities lehman moment arrives as well as Sovereign debt volcano!
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Rank: Elder Joined: 2/26/2012 Posts: 15,980
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Its going to be tough "There are only two emotions in the market, hope & fear. The problem is you hope when you should fear & fear when you should hope: - Jesse Livermore
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Rank: Chief Joined: 5/31/2011 Posts: 5,121
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Jubilee cant afford to let the economy down. The chaps must be working 24/7 considering the challenging environment >>> President Says Government Will Issue Eurobond by End-June http://www.bloomberg.com/news/2...urobond-by-end-june.html
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Rank: Elder Joined: 7/11/2012 Posts: 5,222
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hisah wrote:As a continuation from here - http://www.wazua.co.ke/f...amp;m=554238#post554238
Substandard also has an article about the same, but discussed in more detail - http://bit.ly/RI32bY
Quote:Could the economy be in financial distress? This is the big question among economists after the Government moved to reschedule a $600 million (Sh52.2 billion) syndicated loan. The National Treasury received a three-month extension on the commercial debt after its debut $2 billion (Sh174 billion) Eurobond was delayed.
“What we have done is just extend the repayment... by another three months as we continue discussions on the sovereign bond,” Kamau Thugge, the National Treasury’s principal secretary, told Reuters.
The country secured a two-year loan at an interest rate of seven per cent in 2012 to fund development. Underwritten by Citigroup, Standard Chartered Bank (UK) and Standard Bank of South Africa, the loan was due for full repayment on May 16.
National Treasury Cabinet Secretary Henry Rotich said terms and conditions of the loan remain the same as before, but extension attracted a fee which is usually charged in line with normal practice. He however, declined to give more details.
Economists, however, said the request for the extension of the repayment period is a signal of an economy that is under financial duress.
If indeed this financial distress is present another fat tail episode is coming up in equities... What does 'fat tail' mean?
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Rank: Elder Joined: 5/21/2013 Posts: 2,841 Location: Here
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Mukiri wrote:hisah wrote:As a continuation from here - http://www.wazua.co.ke/f...amp;m=554238#post554238
Substandard also has an article about the same, but discussed in more detail - http://bit.ly/RI32bY
Quote:Could the economy be in financial distress? This is the big question among economists after the Government moved to reschedule a $600 million (Sh52.2 billion) syndicated loan. The National Treasury received a three-month extension on the commercial debt after its debut $2 billion (Sh174 billion) Eurobond was delayed.
“What we have done is just extend the repayment... by another three months as we continue discussions on the sovereign bond,” Kamau Thugge, the National Treasury’s principal secretary, told Reuters.
The country secured a two-year loan at an interest rate of seven per cent in 2012 to fund development. Underwritten by Citigroup, Standard Chartered Bank (UK) and Standard Bank of South Africa, the loan was due for full repayment on May 16.
National Treasury Cabinet Secretary Henry Rotich said terms and conditions of the loan remain the same as before, but extension attracted a fee which is usually charged in line with normal practice. He however, declined to give more details.
Economists, however, said the request for the extension of the repayment period is a signal of an economy that is under financial duress.
If indeed this financial distress is present another fat tail episode is coming up in equities... What does 'fat tail' mean? Mkia mnono!  Life is like playing a violin solo in public and learning the instrument as one goes on.
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Rank: Veteran Joined: 2/10/2010 Posts: 1,001 Location: River Road
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Quote:The Bourse opened the week with a total of 15M shares valued at Kes.319M, down from Kes.972M on a volume of 70M shares posted last Friday.
The NSE 20 Share Index shaved-off a total of 28.08 points to stand at 4939.49.
All Share Index (NASI) shed 0.57 points to stand at 150.58. Quote:"The shilling has quickly depreciated since we opened this morning. There is buying from manufacturers and banks as well as the continuous threats to the nation's security," said Kenya
Commercial Bank senior trader Sheikh Mehran....Mehran said he expected the shilling to trade at 88.50 by the end of the week, saying the demand for dollars was strong. http://af.reuters.com/ar...s/idAFL6N0O51TB20140519
 2011 dejavu all over again
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Rank: Chief Joined: 8/4/2010 Posts: 8,977
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Mukiri wrote:hisah wrote:As a continuation from here - http://www.wazua.co.ke/f...amp;m=554238#post554238
Substandard also has an article about the same, but discussed in more detail - http://bit.ly/RI32bY
Quote:Could the economy be in financial distress? This is the big question among economists after the Government moved to reschedule a $600 million (Sh52.2 billion) syndicated loan. The National Treasury received a three-month extension on the commercial debt after its debut $2 billion (Sh174 billion) Eurobond was delayed.
“What we have done is just extend the repayment... by another three months as we continue discussions on the sovereign bond,” Kamau Thugge, the National Treasury’s principal secretary, told Reuters.
The country secured a two-year loan at an interest rate of seven per cent in 2012 to fund development. Underwritten by Citigroup, Standard Chartered Bank (UK) and Standard Bank of South Africa, the loan was due for full repayment on May 16.
National Treasury Cabinet Secretary Henry Rotich said terms and conditions of the loan remain the same as before, but extension attracted a fee which is usually charged in line with normal practice. He however, declined to give more details.
Economists, however, said the request for the extension of the repayment period is a signal of an economy that is under financial duress.
If indeed this financial distress is present another fat tail episode is coming up in equities... What does 'fat tail' mean? A fat tail is a super size discount period caused by irrational/distress/panic selling period.
KES bleeding with a lofty NSE is unsustainable with the current account status. The harder KES takes it in the chin, the lower NSE will go.
After breaking the 87 barrier on $, KES will get knocks going forward. Industrials are weak and a strong $ will make it worse. Be defensive on banks just in case KES slides hard - I'm bearish banks.
KE econ is facing weak agri, tourism, industrials and a weakening KES with a not so good current account deficit and a high print national budget. At some point equities will have to price in this reality. GDP growth will remain flat or dip unless someone fugdes the figures.
So pricing KE econ like a stock, where is the upside case?
Waiting to see if that eurobond floats, but won't be shocked if the float is shunned or postponed.[color=darkblue]$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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No comment...   $15/barrel oil... The commodities lehman moment arrives as well as Sovereign debt volcano!
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Rank: Elder Joined: 10/18/2008 Posts: 3,434 Location: Kerugoya
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Rank: Elder Joined: 7/11/2012 Posts: 5,222
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hisah wrote:I'm bearish banks Is this personal? And the reason you missed out on HF? Banks are presently doing VERY well.
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Rank: Member Joined: 1/27/2012 Posts: 851 Location: Nairobi
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Rank: Chief Joined: 8/4/2010 Posts: 8,977
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Mukiri wrote:hisah wrote:I'm bearish banks Is this personal? And the reason you missed out on HF? Banks are presently doing VERY well. Personal on the market Nothing close to that. The worst thing a trader can do is to trade on emotions. Bad results...
I missed on HF coz I loaded Kengen which still rallied above my targets when I sold last year together with KCB and loaded member, which I sold this year. CFC is the only bank in my profolio at the moment which reflects my bear bias. I would rather insurance than the banks, but mid tier banks are better than top tier if you must play the banks.
I have been edgy on banks for a while now coz of NPLs. I don't believe the numbers presented by a majority of them when I read the econ figures and the rosy loan provisions/loan recovery stories after the 2011 interest rate spike madness.
If you are on wazua google group I have explained my trades many times. At the moment I am constructing an energy basket which I will compliment with industrials when the time comes. When financials become fancy again, I will loaded them up.
$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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Kenya May Sell Eurobond This Month After Legal Snags ClearedQuote:Kenya may offer its debut Eurobond as early as next week after settling two court-awarded payments linked to a corruption scandal that had blocked the offering, Treasury Secretary Henry Rotich said.
The Treasury doesn’t have “any other legal hurdles” blocking the bond sale and a schedule of planned presentations to investors will be announced this week or “early” next week, Rotich said in an interview today.
“The roadshow will take four or five days, so we could go to the markets this month,” he said in the Rwandan capital, Kigali, where he’s attending the African Development Bank’s annual meetings.
That was fast...! $15/barrel oil... The commodities lehman moment arrives as well as Sovereign debt volcano!
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Rank: Elder Joined: 12/2/2009 Posts: 2,458 Location: Nairobi
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Repercussions? The Sh8b question as banks bail out Government to help it repay loan Link: http://goo.gl/J9JX9M
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