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Elliott Wave Analysis Of The NSE 20
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VituVingiSana
#3501 Posted : Friday, June 05, 2020 7:37:21 AM
Rank: Chief


Joined: 1/3/2007
Posts: 18,103
Location: Nairobi
The banks I have shares in, and believe in, are a handful. I am a VALUE INVESTOR. That is different from Buy and Forget. I used to also own NBK, HFCK, BBK, Coop, KCB, etc at some point.

I may also take "profits" when silly stuff happens. I bought shares in banks when the Interest Rate Cap was passed and prices dropped like crazy! My analysis showed the % drop in price > % drop in profits. I made a nice return in the following 3 months.

In the interests of transparency and sharing of knowledge what I have and like:

I&M (Core) - I got these cheap many years ago but I also like its GRADUAL growth through measured acquisitions. Some quarters may be poor for some subsidiaries but I like the regional growth. Low dividend payout ratio is a negative. On the other hand, it has never has a Rights Issue since it listed.

DTB - I like the regional growth/strategy. Very low dividend payout ratio as a negative.
I think there is a storm (NPL) brewing which will hurt DTB so I have discounted it to BV in my analysis.
As an analogy, if I have a farm of 100 acres but 25 acres are in dispute, I will value my farm at 75 acres. If I lose the 25 acres then I am no better/worse off. If I gain 0-25 acres then it is a bonus.

DTB is trading at less than 40% of BV. It is going to face headwinds in Kenya. Poor loans? NPLs? Too many real estate loans? Customers not paying? Poor systems? . I am OK buying at a 60% discount to BV for that reason. If it loses 20% of its BV, I am still ahead of the game.
Cash is a constraint.

NCBA - Old cheap shares. I was a huge fan but I am reconsidering my position.
Equity - I sold most of my Equity when the price popped (34 to 39) for no apparent reason. I will get back in once I know more about DRC and Atlas Mara. I am disappointed at the cancellation of the dividend. I like King James. Equity has done well for me over the years.

NCBA - Old cheap shares. I was a huge fan but I am reconsidering my position.

SCBK - A few. Love the dividend.

Stanbic - A few. Nice dividend. I suspect a buyout by SAHL in the future given they want to get to 75%. The next step will 100%. I plan to add to my position for the takeover.

I don't have anything significant in other banks.
Greedy when others are fearful. Very fearful when others are greedy - to paraphrase Warren Buffett
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lochaz-index
#3502 Posted : Friday, June 05, 2020 11:19:04 AM
Rank: Veteran


Joined: 9/18/2014
Posts: 1,127
mnandii wrote:
@vvs



You have been a strong defender of Banks even when I stated that they would face dire straits in this bear market and some will likely collapse.

This haircut that KCB is facing will morph into massive defaults soon. The assumption that these restructured loans will be repaid is false - if one cannot suddenly pay his loans due to 'corona' which has been with us for just about 3 months then expect them to default. The financial situation they find themselves in will not just go away even if Corona is managed.

The reason for financial difficulties does not arise from Corona. This is a key point that people will have to contend with. The financial difficulties arise because in a major bear market (depression) that we find ourselves in makes them reluctant to spend. This reluctance is driven by fear, fear of the unknown. In such a situation money flow is restricted and alas the depression.

Seems to me alot of folks are underestimating both the economic and social impact of the pandemic. Similarly investors are clinging on hopes of a V-recovery in the world economy which is misguided. Major trends, supply chains and demand/consumption patterns have been altered already in such a short time that it is mind boggling. Globalization, geo-politics, world trade, unemployment and dependency ratios, rural-urban migration, immigration/emigration, consumer psychology(savings, investment & consumption), have all been turned on their heads while the markets try to figure out the long-term impacts. Not to mention social capital (person to person, people to government and vice-versa) has been eroded and civilization in general is on shaky grounds. This is before you account for the almost certain possibility of a second wave of the virus.
The main purpose of the stock market is to make fools of as many people as possible.
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Sufficiently Philanga....thropic
#3503 Posted : Friday, June 05, 2020 11:48:06 AM
Rank: Elder


Joined: 9/23/2010
Posts: 2,220
Location: Sundowner,Amboseli
Member flirting with March 2020 Corona lows while Mpesa Bank just topped and headed down. All this while the Dow as at a 3 month high with S&P 500 above 3k..INTERESTING!!!
@SufficientlyP
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lochaz-index
#3504 Posted : Friday, June 05, 2020 1:07:12 PM
Rank: Veteran


Joined: 9/18/2014
Posts: 1,127
Sufficiently Philanga....thropic wrote:
Member flirting with March 2020 Corona lows while Mpesa Bank just topped and headed down. All this while the Dow as at a 3 month high with S&P 500 above 3k..INTERESTING!!!

Overall market bias is to the downside. The problem for the NSE is that it doesn't bounce back as hard as other markets in a bullish set up (risk on environment) but crashes just as hard when the downtrend kicks in (risk off). It barely cracked a 10% bounce from the March lows throughout April and May while other markets were/are on the verge of a 50% retracement. Weak posture remains going forward.
The main purpose of the stock market is to make fools of as many people as possible.
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Sufficiently Philanga....thropic
#3505 Posted : Friday, June 05, 2020 3:18:05 PM
Rank: Elder


Joined: 9/23/2010
Posts: 2,220
Location: Sundowner,Amboseli
lochaz-index wrote:
Sufficiently Philanga....thropic wrote:
Member flirting with March 2020 Corona lows while Mpesa Bank just topped and headed down. All this while the Dow as at a 3 month high with S&P 500 above 3k..INTERESTING!!!

Overall market bias is to the downside. The problem for the NSE is that it doesn't bounce back as hard as other markets in a bullish set up (risk on environment) but crashes just as hard when the downtrend kicks in (risk off). It barely cracked a 10% bounce from the March lows throughout April and May while other markets were/are on the verge of a 50% retracement. Weak posture remains going forward.

Correct. This divergence is quite confoundingd'oh!
@SufficientlyP
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wukan
#3506 Posted : Friday, June 05, 2020 6:49:38 PM
Rank: Veteran


Joined: 11/13/2015
Posts: 1,590
lochaz-index wrote:
Sufficiently Philanga....thropic wrote:
Member flirting with March 2020 Corona lows while Mpesa Bank just topped and headed down. All this while the Dow as at a 3 month high with S&P 500 above 3k..INTERESTING!!!

Overall market bias is to the downside. The problem for the NSE is that it doesn't bounce back as hard as other markets in a bullish set up (risk on environment) but crashes just as hard when the downtrend kicks in (risk off). It barely cracked a 10% bounce from the March lows throughout April and May while other markets were/are on the verge of a 50% retracement. Weak posture remains going forward.


For the first time in years I feel quite bullish about the market. The 2020's will be roaring for East africa.
1. The recent downward trend in prices will slowly attract risk capital to equities. There is more upside reward.
2. Opus dei has also shed his cautious approach to monetary stance.
3. Ouru is starting to get right on the right fiscal stimulus transmission and prioritizing low capital but high return projects. He now looks quite in charge politically to check on leakages.
4. Geopolitics of US UK v China favors Kenya. IMF and world bank, eurobond investors have been quite tame with us. Battles of the moneyed are sweet.
5. informal sector went through the interest rate cap stress test and built the resilience. My anecdotal survey shows young people raring to go. folks invested in the formal feudal BC economy will find the going tough.

Pray The general mood of despondency prevailing in wazua confirms a bias to the upsidesmile smile Market has caught many flatfooted. The coming race is not for the flatfooted. Get your war chests ready
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mnandii
#3507 Posted : Friday, June 05, 2020 8:30:55 PM
Rank: Elder


Joined: 10/11/2006
Posts: 2,304
Sufficiently Philanga....thropic wrote:
Member flirting with March 2020 Corona lows while Mpesa Bank just topped and headed down. All this while the Dow as at a 3 month high with S&P 500 above 3k..INTERESTING!!!

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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mnandii
#3508 Posted : Tuesday, June 09, 2020 11:09:51 AM
Rank: Elder


Joined: 10/11/2006
Posts: 2,304
Remember. This bear market creates the clearest Elliott Wave patterns. It is your best opportunity to make money.
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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iris
#3509 Posted : Tuesday, June 09, 2020 11:23:19 AM
Rank: Member


Joined: 9/11/2014
Posts: 228
Location: Nairobi
mnandii wrote:
Remember. This bear market creates the clearest Elliott Wave patterns. It is your best opportunity to make money.


Mnandii, is your last wave for Safaricom still valid?
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mnandii
#3510 Posted : Tuesday, June 09, 2020 5:23:33 PM
Rank: Elder


Joined: 10/11/2006
Posts: 2,304
mnandii wrote:
Markets crash not because people think it will do so but because they become certain that it will not.


Post 1983, July 21st 2016
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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mnandii
#3511 Posted : Tuesday, June 09, 2020 5:26:34 PM
Rank: Elder


Joined: 10/11/2006
Posts: 2,304
mnandii wrote:
Schools are burning now. Most people( even theories) can't connect the burning of schools to the Stock Market. Yet, they are of the same causality.

I did anticipate the decline in our stock market more than a year ago (see the very first post of this wazua.co.ke thread). Now the the NSE 20 share index is declining massively.

I've also posted notes here on the Socionomic aspects of the declining social mood (as measured by the declining stock index). I also indicated that the fact of Universities being opened in almost every corner of Kenya, the winning by the Teachers Union of a tremendous increase in salary for teachers and the selling of a private school at an extremely high price marked the topping process in education matters. The bear market in education was the next logical expectation. Even now there is alot of interest in higher education but when the bear catches proper, then, expect education to be shunned.

So, how do we connect the burning of schools to our stock market and then to society as a whole? Simple. The NSE 20 share Index is falling, meaning that negative social mood (the Index is sensitive to mood) is taking over at large degree.

The youth respond quicker to changes in social mood (remember they set the trend in fashion for example) and that is why one of the negative consequence of a decline in social mood , i.e. the tendency to destroy (by burning) has manifested itself first in schools (where most youths can be found). This means that in Kenya, going forward, negative mood will entrench itself and the rest of society will also show the destructive impulses that the youth are exhibiting. I have argued here before that come 2017, and IF the the stock market will be shuttling to below 2000 levels (which I expect to happen) then the next General Elections will be bloody i.e far worse than the 2007 -2008 one.

The beauty of socionomics is that you get to anticipate events before they happen and you can therefore prepare yourself adequately.

Do read:

-THE WAVE PRINCIPLE OF HUMAN SOCIAL BEHAVIOUR by ROBERT PRECHTER.

-CONQUER THE CRASH by ROBERT PRECHTER.

www.socionomics.net



Post 1997, July 2016


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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VituVingiSana
#3512 Posted : Wednesday, June 10, 2020 5:21:55 AM
Rank: Chief


Joined: 1/3/2007
Posts: 18,103
Location: Nairobi
Sufficiently Philanga....thropic wrote:
lochaz-index wrote:
Sufficiently Philanga....thropic wrote:
Member flirting with March 2020 Corona lows while Mpesa Bank just topped and headed down. All this while the Dow as at a 3 month high with S&P 500 above 3k..INTERESTING!!!

Overall market bias is to the downside. The problem for the NSE is that it doesn't bounce back as hard as other markets in a bullish set up (risk on environment) but crashes just as hard when the downtrend kicks in (risk off). It barely cracked a 10% bounce from the March lows throughout April and May while other markets were/are on the verge of a 50% retracement. Weak posture remains going forward.

Correct. This divergence is quite confoundingd'oh!

Cognitive dissonance. The market has become cheaper on fundamentals. It will pay off by being patient on carefully selected stocks.
Greedy when others are fearful. Very fearful when others are greedy - to paraphrase Warren Buffett
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Wakanyugi
#3513 Posted : Wednesday, June 10, 2020 1:01:48 PM
Rank: Veteran


Joined: 7/3/2007
Posts: 1,634
wukan wrote:
lochaz-index wrote:
Sufficiently Philanga....thropic wrote:
Member flirting with March 2020 Corona lows while Mpesa Bank just topped and headed down. All this while the Dow as at a 3 month high with S&P 500 above 3k..INTERESTING!!!

Overall market bias is to the downside. The problem for the NSE is that it doesn't bounce back as hard as other markets in a bullish set up (risk on environment) but crashes just as hard when the downtrend kicks in (risk off). It barely cracked a 10% bounce from the March lows throughout April and May while other markets were/are on the verge of a 50% retracement. Weak posture remains going forward.


For the first time in years I feel quite bullish about the market. The 2020's will be roaring for East africa.
1. The recent downward trend in prices will slowly attract risk capital to equities. There is more upside reward.
2. Opus dei has also shed his cautious approach to monetary stance.
3. Ouru is starting to get right on the right fiscal stimulus transmission and prioritizing low capital but high return projects. He now looks quite in charge politically to check on leakages.
4. Geopolitics of US UK v China favors Kenya. IMF and world bank, eurobond investors have been quite tame with us. Battles of the moneyed are sweet.
5. informal sector went through the interest rate cap stress test and built the resilience.


6. All that money the Fed is printing will need to find its way somewhere and frontier markets are an obvious option
"The opposite of a correct statement is a false statement. But the opposite of a profound truth may well be another profound truth." (Niels Bohr)
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mnandii
#3514 Posted : Thursday, June 11, 2020 8:14:07 PM
Rank: Elder


Joined: 10/11/2006
Posts: 2,304
mnandii wrote:
mnandii wrote:
Kibe21 wrote:
Hi, Mnandii, could you do one on KPLC?


Checking on it.




KPLC appears to have completed an impulsive thrust(waves 12345) from a triangle.
I expect the share to turn bullish from current levels. Key Upward target is 5.57 which if attained should give rise to further strength targeting at least Ksh 11.80s.




KPLC has started the move UP as expected.
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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mnandii
#3515 Posted : Thursday, June 11, 2020 8:28:37 PM
Rank: Elder


Joined: 10/11/2006
Posts: 2,304


DIAMOND TRUST BANK KENYA.
Wave [iii] DOWN in progress. Has much further down to fall.
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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mnandii
#3516 Posted : Thursday, June 11, 2020 8:34:03 PM
Rank: Elder


Joined: 10/11/2006
Posts: 2,304


I have been expecting a turn UP in WTK for sometime. Looks like it already started.
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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mnandii
#3517 Posted : Thursday, June 11, 2020 8:37:36 PM
Rank: Elder


Joined: 10/11/2006
Posts: 2,304


Bamburi Cement. A bottom is still elusive. Should fall further .
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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mnandii
#3518 Posted : Thursday, June 11, 2020 8:44:09 PM
Rank: Elder


Joined: 10/11/2006
Posts: 2,304


Standard Chartered Bank. Falling as expected. There's room for further weakness.
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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mnandii
#3519 Posted : Saturday, June 27, 2020 8:49:59 AM
Rank: Elder


Joined: 10/11/2006
Posts: 2,304


Poleni Bamburi shareholders. The bottom does not appear anywhere close. Sad Sad
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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mnandii
#3520 Posted : Monday, June 29, 2020 7:27:32 PM
Rank: Elder


Joined: 10/11/2006
Posts: 2,304


Williamson Tea Kenya (WTK). We have been patiently waiting, expecting it to start rising. Our forecast was right.
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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