Date has been set for the 10th July. Inflation looks to continue its downward trend with oil prices hitting USD91 and expectation of the Murban following these international prices (we expect the Murban to be USD103-107 at close of June), improved weather conditions thus declining food component pressure on CPI. Non-food, non-fuel increased in May 2012 to a touch above 10% - determining factor.

On the FX front, CBK has enough ammunition with increase of FX reserves. Regulator has stayed out of the market in 3 out of 5 days last week, expect increased activity from the regulator this week with anticipated increase in importer's demand.

Are we going to finally see a cut like we saw in Uganda this past meeting? What are your thoughts on it?

As long as CBK needs to be selling USD to strengthen KES, I expect CBR to remain sky high. In May KES started weakening showing the threat remains alive.

Kenya's economy slows to 3.5pc in first quarter

http://www.businessdailyafrica....4/-/arl3ymz/-/index.html

Hold CBR @18% some more. Let the feed-through preceed. Personally, easing as from Q4 will do. Cut based on banked longrains harvests & energy reliefs in the comfort of short rains.

@hisah i thought the market was reflecting the poor macro situation... Many Stocks are trading at single digit P/Es & below their tangible book value.. What more do you want as a rational investor??

Growth of 3.5% is still POSITIVE growth.. In these economic hard times (CBR @ 18%) any growth is welcome...

despite only 1.7% growth in 2008 & 2.1% growth in 2009 corporates still managed positive growth in earnings so @ 3.5% i still expect double digit growth in EPS from corporates in 2012..

inotherwords the fundies are not great but still worthwhile for investing...