Finally. We may yet have a market after a seven month snooze fest. That February low needs to give way to the bear.
If tbills/bonds rates are bottoming out investors had better hold on tight coz this could be bloodbath. Eurobond talk has died down and the whole thing could have fallen through. (Of all African states looking to float a Eurobond this year I think only South Africa managed to pull it off...reason being the premium rates demanded by the market discouraged the rest.) Local borrowing becomes the only option for our cash strapped government and its expansionary budget.
Add to this an expensive debt basket courtesy of loans sourced from China and our debt to GDP ratio will balloon very fast. The implication here is we can as well forget borrowing from the international markets both in the short and medium term since the rates will be unreasonably prohibitive.
USDKES, this will be a rout, fed hike or not. Capital flows head for the exit and a dollar shortage comes knocking.
On matters to do with local banks...I have seen even the so-called lean, mean and conservative banks are choking under the weight of NPLs but the pain is yet to hit home vs their bottomlines.
That said, we need a proper reset of the KE economy and a squeaky clean washout. I consider GFC to have been the appetizer/warm up for what will eventually be the main course(present time) and frankly, we should be cheering coz the discounts may be way bigger than any of us ever imagined. Likewise, the ensuing bull run will be gargantuan.
The main purpose of the stock market is to make fools of as many people as possible.