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Standard Chartered
VituVingiSana
#21 Posted : Saturday, March 06, 2010 9:08:25 PM
Rank: Chief


Joined: 1/3/2007
Posts: 18,121
Location: Nairobi
The CMA, NSE & CBK makes is difficult for firms to raise bonds... Yes, there should be due diligence but let there be flexibility in the types (seniority) of bonds.

If firms could raise bonds on the 'cheap' they would prefer them to Bank loans. Issuing a bond os very expensive for the firms...

I would rather buy a Kakuzi Bond @ 10% (Kakuzi probably pays 15% to banks) than a bank CD at 5%... Why? The 5% 'extra'... I already have GoK Bonds... Coz they pay better than banks!
Kakuzi gets the cash at 5% discount (less fees+admin)...

BTW... coz of (many) folks like me... banks cant lend cheap! I want the highest interest they pay or I go elsewhere...
Greedy when others are fearful. Very fearful when others are greedy - to paraphrase Warren Buffett
VituVingiSana
#22 Posted : Saturday, March 06, 2010 9:59:22 PM
Rank: Chief


Joined: 1/3/2007
Posts: 18,121
Location: Nairobi
Don't hate the banker

http://www.ratio-magazin...ont-Hate-the-Banker.html
Greedy when others are fearful. Very fearful when others are greedy - to paraphrase Warren Buffett
Scubidu
#23 Posted : Sunday, March 07, 2010 1:15:01 PM
Rank: Veteran


Joined: 9/4/2009
Posts: 700
Location: Nairobi
@Chali & cnn. It is reserves and capital that limit how much a bank can lend...not customer deposits. The last time you took a loan how were the funds disbursed? Bank Transfer? Bankers Cheque? And what are they drawn on? A Deposit A/c. Clearly it wud be difficult to claim that Banks made their loan from your savings account becoz your savings account balance never changes (just check at your ATM statement every 5 minutes, it's always the same figure you left). The banks have no money, all they do is create deposits (create credit).

So if a bank can make a loan (to govt or private) which results in the creation on a deposit (on which a check can be drawn) then aren't assets and liabilities growing respectively? Why banks need to attract customer deposits is becoz some of the loans written are made to customers who bank with another bank resulting in a transfer of funds...since banks lend to each other everyday at the end of the day all they do is transfer the net amount of these funds.

But the fact is that when you go to a bank for the first time as a new customer and take a loan they create a deposit account for you, that is the accounting entry.
“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
mzazii
#24 Posted : Sunday, March 07, 2010 7:43:03 PM
Rank: New-farer


Joined: 12/2/2009
Posts: 82
Location: kenya
[b]Greedy when others are fearful. Very fearful when others are greedy - to paraphrase Warren Buffett

Greedy when others are fearful. Very fearful when others are greedy - to paraphrase Warren Buffett
[/b]...


Vitu Vingi Sana

Your signature - RED AND BOLD - is giving me a headache and 'burning' my eyes. At least remove the bold, WACHA KUWEKA VITU VINGI SANA!!LOL!!
Opportunity may knock once, but temptation bangs on the front door forever..
VituVingiSana
#25 Posted : Monday, March 08, 2010 7:01:12 AM
Rank: Chief


Joined: 1/3/2007
Posts: 18,121
Location: Nairobi
@mzazil - I believe in it... I am a huge Warren Buffett fan... Get a pair of (fake) sunglasses... 200/- from the street vendor...
Greedy when others are fearful. Very fearful when others are greedy - to paraphrase Warren Buffett
jimmy007
#26 Posted : Monday, March 08, 2010 7:12:52 AM
Rank: New-farer


Joined: 3/8/2010
Posts: 5
Location: india
he who is working hard and doing is work in a systematical manner becomes good CA
Scubidu
#27 Posted : Monday, March 08, 2010 8:21:29 AM
Rank: Veteran


Joined: 9/4/2009
Posts: 700
Location: Nairobi
Would SCBK be interested in a brokerage licence to trade bonds at the NSE...methinks definately. And what's easier than poaching major bond traders from the investment banking community. Why are they squeezing out the middleman?
“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
VituVingiSana
#28 Posted : Monday, March 08, 2010 8:37:03 AM
Rank: Chief


Joined: 1/3/2007
Posts: 18,121
Location: Nairobi
Scubidu wrote:
Would SCBK be interested in a brokerage licence to trade bonds at the NSE...methinks definately. And what's easier than poaching major bond traders from the investment banking community. Why are they squeezing out the middleman?

SCBK already proficient in trading bonds. They do not need to poach anyone. Plus they have talent depth from their other affiliates in S.Africa & Asia...

Why do they need middlemen?
Greedy when others are fearful. Very fearful when others are greedy - to paraphrase Warren Buffett
kizee
#29 Posted : Monday, March 08, 2010 8:56:06 AM
Rank: Member


Joined: 1/9/2008
Posts: 537
vvs

u must use a middleman to trade bonds in kenya..unless offcourse ur the said middleman
VituVingiSana
#30 Posted : Monday, March 08, 2010 9:00:00 AM
Rank: Chief


Joined: 1/3/2007
Posts: 18,121
Location: Nairobi
@kizee - Mine was a rhetorical question... SCBK do not need middlemen except for the corrupt idiots who are in charge of regulation in Kenya force them to...
Greedy when others are fearful. Very fearful when others are greedy - to paraphrase Warren Buffett
sparkly
#31 Posted : Monday, March 08, 2010 9:09:16 AM
Rank: Elder


Joined: 9/23/2009
Posts: 8,083
Location: Enk are Nyirobi
mzazii wrote:
[b]Greedy when others are fearful. Very fearful when others are greedy - to paraphrase Warren Buffett

Greedy when others are fearful. Very fearful when others are greedy - to paraphrase Warren Buffett
[/b]...


Vitu Vingi Sana

Your signature - RED AND BOLD - is giving me a headache and 'burning' my eyes. At least remove the bold, WACHA KUWEKA VITU VINGI SANA!!LOL!!


@ mzazii, there is someone who posts in a very bright/ Luminous blue, really burns my eyes especially on the small mobile screen.
Life is short. Live passionately.
Scubidu
#32 Posted : Monday, March 08, 2010 9:56:04 AM
Rank: Veteran


Joined: 9/4/2009
Posts: 700
Location: Nairobi
@vvs. I understand banks are more than capable of trading without middlemen, but why does the NSE/CMA want this? Not all of the bank's bonds are held to maturity unlike the fund managers, so it doesn't sound like this is in the best interest of the membership of brokers. Is it a procedural issue or the commissions? And from a regulatory position is it easier for CMA to watch the market without middlemen?
“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
kizee
#33 Posted : Monday, March 08, 2010 10:32:35 AM
Rank: Member


Joined: 1/9/2008
Posts: 537
why does the cma has to regulate the mkt? what value does cma oversite add? how many spurios trades has cma flagd? how many instances of unethical practic has cma unearthed??? let the market regulate itself...otc markets are very powerful at this
VituVingiSana
#34 Posted : Monday, March 08, 2010 10:33:24 AM
Rank: Chief


Joined: 1/3/2007
Posts: 18,121
Location: Nairobi
Scubidu wrote:
@vvs. I understand banks are more than capable of trading without middlemen, but why does the NSE/CMA want this? Not all of the bank's bonds are held to maturity unlike the fund managers, so it doesn't sound like this is in the best interest of the membership of brokers. Is it a procedural issue or the commissions? And from a regulatory position is it easier for CMA to watch the market without middlemen?

NSE/CMA want middlemen coz it gives them 'power' & commissions/fees...

CMA can institute reporting rules but for the majority of Bonds... GoK bonds... the CBK has a far greater role to play...
Greedy when others are fearful. Very fearful when others are greedy - to paraphrase Warren Buffett
Scubidu
#35 Posted : Monday, March 08, 2010 12:31:52 PM
Rank: Veteran


Joined: 9/4/2009
Posts: 700
Location: Nairobi
kizee. I gather you don't have much faith in CMA, but have a lot of faith in our honest bond traders. So if 80% of the secondary bond trading is controlled by 5 players, they can regulate themselves effectively? So how will they do this, through some sort of OTC bond association? How do other otc markets you know regulate themselves without govt oversight?
“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
kizee
#36 Posted : Monday, March 08, 2010 12:36:51 PM
Rank: Member


Joined: 1/9/2008
Posts: 537
the SA fixd income market was fully OTC the members form an association which regulates errant members...in addition if say a player posts a spurious price,an arbitraguer will spot this and taek advantage and the market will revert to its appropriate level...so what if the market is dominated by 5 players? the reason why we have 5 players is because the market offers no comparative advantage to wud be new players
kizee
#37 Posted : Monday, March 08, 2010 12:39:41 PM
Rank: Member


Joined: 1/9/2008
Posts: 537
lemme add that the fx market is OTC and it self regulates albeit with some intervention of the dealers association
Scubidu
#38 Posted : Monday, March 08, 2010 1:54:12 PM
Rank: Veteran


Joined: 9/4/2009
Posts: 700
Location: Nairobi
The association of otc members sounds like a good idea, but in Kenya (I don't know) and the NSE is being demutualized becoz Kenyan traders can't be trusted...somehow 5 huge self-regulating bond trading desks doesn't inspire more confidence for me either.

I think there's the issue of banks being the custodians of public money...they would be funded by us to take risks...if they can speculate and by engaging in "spurious pricing" wud this lead to some sort of abuse...I think the trends in oversight are moving away from self-regulation with regard to proprietary trading within banks.

Would you then introduce short selling? Becoz as you mentioned the market should correct itself?
“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
kizee
#39 Posted : Monday, March 08, 2010 3:00:10 PM
Rank: Member


Joined: 1/9/2008
Posts: 537
banks in kenya are funded by taxpayers? i think ur confused there my man...the free market is the best mechanism for mkt regulation...bar none! the otc bond mkt wud self regulate but the mkt players wud correct any malfeasances...i wud def introduce short sellin y not? theres a HRT mkt wat wud be the risk? short sellin creates liquidity...wat happens if ur tradin bonds and the int rates rise? u cant really trade can u? unless u can short...btw are u aware how much cma wants to charge banks for the license?
VituVingiSana
#40 Posted : Monday, March 08, 2010 3:45:50 PM
Rank: Chief


Joined: 1/3/2007
Posts: 18,121
Location: Nairobi
Most Kenyan banks are NOT funded by taxpayers... and should not be...

@scubidu - An OTC is fine. Even if there is not OTC... let the banks deal as members within the NSE... the only beneficiaries at the moment are the middlemen (the brokers), NSE & CMA coz they earn fees for doing little!!!

The CMA & NSE get way too much per trade...
Greedy when others are fearful. Very fearful when others are greedy - to paraphrase Warren Buffett
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