Wazua
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Kenya Economy Watch
Rank: Member Joined: 3/10/2008 Posts: 301 Location: Abu Dhabi
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The Eurobond is generating much interest here in the office (bond desk) - Trading at 102.00 on day one! That's a good return given the skirmishes going on at the coast.
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Rank: Elder Joined: 11/5/2010 Posts: 2,459
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Morning wazuans,
Would someone kindly explain the huge jump in yesterday's 91-day t bill auction. From 9.275% to 10.25%.
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Rank: Member Joined: 9/29/2010 Posts: 679 Location: nairobi
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only cbk know,overnight rates have crushed,liquidity is high...the tbill auction is a rigged process
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Rank: Elder Joined: 9/23/2010 Posts: 2,221 Location: Sundowner,Amboseli
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FRM2011 wrote:
Morning wazuans,
Would someone kindly explain the huge jump in yesterday's 91-day t bill auction. From 9.275% to 10.25%.
Sad. Doesn't quite add up given the recent success of the Eurobond at far less yields for longer maturity periods, and also the fact that the subscription rate for this 91 day T/Bill was 288%. @SufficientlyP
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Rank: Veteran Joined: 2/10/2010 Posts: 1,001 Location: River Road
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FRM2011 wrote:
Morning wazuans,
Would someone kindly explain the huge jump in yesterday's 91-day t bill auction. From 9.275% to 10.25%.
it's an auction willing buyer willing seller. The over subscription should tell you those rates will come crushing down in the next few weeks. The money market fellows thought the eurobond will not do so well so they kept off the auction last few weeks. Maybe it's time to run away from money market back to stocks
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Rank: Chief Joined: 5/31/2011 Posts: 5,121
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FRM2011 wrote:
Morning wazuans,
Would someone kindly explain the huge jump in yesterday's 91-day t bill auction. From 9.275% to 10.25%.
cbk stretched it by accepting Kes. 9B in an offer of Kes. 4B. Reading a gush hungry for the funds before the dollars land
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Rank: Elder Joined: 10/11/2006 Posts: 2,304
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mwekez@ji wrote:FRM2011 wrote:
Morning wazuans,
Would someone kindly explain the huge jump in yesterday's 91-day t bill auction. From 9.275% to 10.25%.
cbk stretched it by accepting Kes. 9B in an offer of Kes. 4B. Reading a gush hungry for the funds before the dollars land Cartoons would have also helped explain. Any source for long term charts of the rates. Conventional thinkers waste time building shelters when they are unnecessary and then have no shelters when they need them the most. Socionomists do the opposite.
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Rank: Chief Joined: 5/31/2011 Posts: 5,121
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mnandii wrote:mwekez@ji wrote:FRM2011 wrote:
Morning wazuans,
Would someone kindly explain the huge jump in yesterday's 91-day t bill auction. From 9.275% to 10.25%.
cbk stretched it by accepting Kes. 9B in an offer of Kes. 4B. Reading a gush hunger for the funds before the dollars land Cartoons would have also helped explain. Any source for long term charts of the rates. This gives from Jan 2012 https://centralbank.go.ke/index.php/treasury-bill/91-days
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Rank: Elder Joined: 10/11/2006 Posts: 2,304
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mwekez@ji wrote:mnandii wrote:mwekez@ji wrote:FRM2011 wrote:
Morning wazuans,
Would someone kindly explain the huge jump in yesterday's 91-day t bill auction. From 9.275% to 10.25%.
cbk stretched it by accepting Kes. 9B in an offer of Kes. 4B. Reading a gush hunger for the funds before the dollars land Cartoons would have also helped explain. Any source for long term charts of the rates. This gives from Jan 2012 https://centralbank.go.ke/index.php/treasury-bill/91-days Thanks @mwekea@ji. I'll plot and see how it goes. Conventional thinkers waste time building shelters when they are unnecessary and then have no shelters when they need them the most. Socionomists do the opposite.
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Rank: Chief Joined: 5/31/2011 Posts: 5,121
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mnandii wrote:mwekez@ji wrote:mnandii wrote:mwekez@ji wrote:FRM2011 wrote:
Morning wazuans,
Would someone kindly explain the huge jump in yesterday's 91-day t bill auction. From 9.275% to 10.25%.
cbk stretched it by accepting Kes. 9B in an offer of Kes. 4B. Reading a gush hunger for the funds before the dollars land Cartoons would have also helped explain. Any source for long term charts of the rates. This gives from Jan 2012 https://centralbank.go.ke/index.php/treasury-bill/91-days Thanks @mwekea@ji. I'll plot and see how it goes. Karibu @mnandii. And check out the "Export all to Excel" button in the page. It has 17 years data.
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Rank: Chief Joined: 8/4/2010 Posts: 8,977
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kizee1 wrote:only cbk know,overnight rates have crushed,liquidity is high...the tbill auction is a rigged process Hmmm... Is a rate hike coming?$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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mwekez@ji wrote:FRM2011 wrote:
Morning wazuans,
Would someone kindly explain the huge jump in yesterday's 91-day t bill auction. From 9.275% to 10.25%.
cbk stretched it by accepting Kes. 9B in an offer of Kes. 4B. Reading a gush hungry for the funds before the dollars land More like a mopping exercise. @SufficientlyP
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Rank: Member Joined: 9/29/2010 Posts: 679 Location: nairobi
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Sufficiently Philanga....thropic wrote:mwekez@ji wrote:FRM2011 wrote:
Morning wazuans,
Would someone kindly explain the huge jump in yesterday's 91-day t bill auction. From 9.275% to 10.25%.
cbk stretched it by accepting Kes. 9B in an offer of Kes. 4B. Reading a gush hungry for the funds before the dollars land More like a mopping exercise. how does this then push the rate up? methinks one bidder gave cbk a huge chunk at a high rate and cbk being being cbk,took the bait,thus the average got distorted
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Rank: Elder Joined: 10/11/2006 Posts: 2,304
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Yes. A promise is a debt so am paying mine.  Above is the long term chart of 91 DAY treasury bills rate (weekly average). From the 27.204 top to 0.783 low, the rates traced out a clear corrective wave consisting of wave A, then a triangle and then wave C. Wave C = 0.628% of wave A. 0.628 is just a few from the Golden Ratio 0.618%. The move from the 0.783 low to 20.799 high is one of two alternatives. It's either a developing impulse wave consisting of waves (i) (ii) i ii. OR it is a simple zigzag pattern. It will take probably a decade for either option to become clear. Fortunately, we don't have to wait years to make a prediction of rates in the short term since waves are fractal in nature. The drop from 20.799 to 5.11 low is also in three waves. Below is the blow up..  The rise from 5.11 to 10.498 is impulse and that is the key. Impulse waves determine the direction of the trend. So after the impulse we have a three wave (zigzag) move back to 8.756. CONCLUSION: 91 DAY treasury bill rates are expected to continue rising. This is also in line with deflationary pressures affecting the global markets. When treasury rates rise, the prices fall. Quote:Conventional analysts who have not studied the Great Depression or who expect bonds to move 'contra-cyclically' to stocks are going to be shocked to see their bonds plummeting in value right along with the stock market. Ironically, economists will see the first wave down in bonds (and first wave up in rates) as a sign of inflation and recovery, when in fact, it will be the opposite. Conquer The Crash, Pg 145.Quote:As debt prices fall, yields rise. If you are in long term bonds, you're stuck with only the 'falling prices' part of the equation. It's better to own short term instruments, which can keep rolling over at ever-higher yields to compensate substantially for price losses. So, generally speaking, for safety, it is better to own high-quality short-term debt than long-term debt.
Conquer The crash, Pg 150. Best to all. Conventional thinkers waste time building shelters when they are unnecessary and then have no shelters when they need them the most. Socionomists do the opposite.
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Rank: Member Joined: 9/29/2010 Posts: 679 Location: nairobi
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hisah wrote:kizee1 wrote:only cbk know,overnight rates have crushed,liquidity is high...the tbill auction is a rigged process Hmmm... Is a rate hike coming? that would be tragic,the last thing the economy needs at this time is a tightening
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Rank: Elder Joined: 10/11/2006 Posts: 2,304
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Quote:Case in point. This year’s budget contained an increase in tariffs for the local steel industry. Now, industries don’t come more capital intensive than steel, so why would an economy that needs to create jobs single out the most capital intensive industry for protection? And why now? Standard Gauge Railway, that’s why. It’s the oligarchs sniffing out the opportunities to cash in.
But what has this to do with insecurity, one might ask? It will make importing the stuff that Jua Kali artisans make for us: windows, doors, furniture, karais, and the rest of it, cheaper. As of last year, Jua Kali manufacturing employed 2.4 million people.
This is not only close to ten times the number employed in ALL the formal manufacturing industry (254,000), it is in fact one and a half times the 1.6 million total employment in the entire formal private sector economy.
Let us, for argument’s sake, suppose that this protection will destroy 10 per cent of Jua Kali manufacturing jobs and increase the formal manufacturing ones by 20 per cent. It works to 240,000 jobs sacrificed for 50,000 jobs, that is, a net loss of 190,000jobs — round it up to 200,000. The vast majority will suffer without bitterness, but a few will not take it lying down. Let’s say only one per cent turn to crime. That is two thousand more criminals. http://www.nation.co.ke/oped/Op...6/-/5cqmblz/-/index.htmlConventional thinkers waste time building shelters when they are unnecessary and then have no shelters when they need them the most. Socionomists do the opposite.
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Rank: Elder Joined: 2/26/2012 Posts: 15,980
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mnandii wrote:Quote:Case in point. This year’s budget contained an increase in tariffs for the local steel industry. Now, industries don’t come more capital intensive than steel, so why would an economy that needs to create jobs single out the most capital intensive industry for protection? And why now? Standard Gauge Railway, that’s why. It’s the oligarchs sniffing out the opportunities to cash in.
But what has this to do with insecurity, one might ask? It will make importing the stuff that Jua Kali artisans make for us: windows, doors, furniture, karais, and the rest of it, cheaper. As of last year, Jua Kali manufacturing employed 2.4 million people.
This is not only close to ten times the number employed in ALL the formal manufacturing industry (254,000), it is in fact one and a half times the 1.6 million total employment in the entire formal private sector economy.
Let us, for argument’s sake, suppose that this protection will destroy 10 per cent of Jua Kali manufacturing jobs and increase the formal manufacturing ones by 20 per cent. It works to 240,000 jobs sacrificed for 50,000 jobs, that is, a net loss of 190,000jobs — round it up to 200,000. The vast majority will suffer without bitterness, but a few will not take it lying down. Let’s say only one per cent turn to crime. That is two thousand more criminals. http://www.nation.co.ke/oped/Op...6/-/5cqmblz/-/index.html In red.....thats an assumption. They can always diversify Lets assume those in the informal sectors either dont pay taxes or underpay it while those in the formal sector are tax compliant isnt that a win for GOK? "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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World Bank to release Sh123bn for infrastructure and devolution http://www.businessdailyafrica....2/-/hw76efz/-/index.html
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Rank: Elder Joined: 10/1/2009 Posts: 2,436
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@hisah, swali schoopid: Which is which: the anticipated low interest regime expected to spur bond trading, with those currently holding positions expecting to reap big OR domestic bond market expected to dry up as investors go for Eurobond with higher yields?
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Rank: Chief Joined: 8/4/2010 Posts: 8,977
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Intelligentsia wrote:@hisah, swali schoopid: Which is which: the anticipated low interest regime expected to spur bond trading, with those currently holding positions expecting to reap big OR domestic bond market expected to dry up as investors go for Eurobond with higher yields?
Short term (3-6 months) liquidity tightness to deal with the inflation headache and weak KES. Long term liquidity flood since KE econ is in a slump. But the liquidity injection has to be done carefully so that it doesn't spike inflation as well as worsen the current account deficit status. Q1 2015 is likely the time when the injection comes in en masse after monetary guys gauge the current inflation and econ slump situation. Banks will definitely be forced to lend cheaply. How I don't know, but this is coming after that massive eurobond oversub.$15/barrel oil... The commodities lehman moment arrives as well as Sovereign debt volcano!
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