MjasriaMali wrote:For learning seek. Whats the correlation between, the Euro Bond, NSE equity performance and exchange rates
Euro bond means you are tapping into dollars residing in Europe held by fund managers, pension schemes and individual investors. That means government has more access to dollars and can therefore come to rescue of kenya shilling so theoretically the exchange rate should improve(more supply of dollars than demand). It also means the government no longer needs to borrow from the local market at 12% when it can get cheaper money abroad at 6.75% so the local fund managers and investors in Kenya have to look for better yielding assets so they start to look for equities forcing up the prices at the NSE.
This is all theory because you have to consider other factors such as the current account deficit and how its affected by low tourism earnings, high oil prices. You also have to look at how the government will finance its budget deficit