Wazua
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Madness at the NSE
Rank: Elder Joined: 12/7/2012 Posts: 11,935
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wukan wrote:As for market forces for interest rate it's a bit too late to change gears. There is the law of unintended consequences. The irony of it all is that letter from Mediamax on the intended redundancy You simply can't make this stuff up. Quote:In a notice to the Ministry of Labour and Social Services, Acting CEO Ken Ngaruiya said the company has been forced by the recent economic downturn and loss of its major revenue streams to reorganise its staff structure and abolish some positions as part of its cost-cutting measures. They have used wanjiku through propaganda and achieved what they wanted now they don't need them anymore. In the business world, everyone is paid in two coins - cash and experience. Take the experience first; the cash will come later - H Geneen
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Rank: Elder Joined: 9/23/2010 Posts: 2,225 Location: Sundowner,Amboseli
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Great points @Wukan. Well no one is forcing the banks to lend just like no one will force GoK to scrap its populist measures like Rate Caps. THE MARKETS WILL! In 2003, when Kibaki took over the reigns of power, the banks were not lending to wanjiku and Kibaki, via then Finance CS Mwiraria(may his soul rest in peace) didn't bother forcing them to. All they did was lower cbr (easing) and the rest is history. The current folks at treasury are afraid of easing as this will awaken the USD bulls and there is that little issue of mounting USDloans, including the Eurobonds....and the resultant hike in the figure in KES terms.. Well the thing is, at some point, they will have to bow down to THE MARKETS!! @SufficientlyP
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Rank: Veteran Joined: 11/13/2015 Posts: 1,653
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I agree that at some point they will bow down to the markets especially if USD bulls rage. But it is viable politically, socially and economically to hold things constant for a decade to allow for the debt binge to balance off. Treasury's kick-the-can strategy on debt shows this as more likely.
The biggest casualty will be the poor and the emerging middle class who will stagnate for a decade because of low employment and stagnant wages. However, given the docile nature of kenya's middle class it will have little consequence for the power elite. They can pull it off. Wanjiku is easily taken in by propaganda as @Angel puts it.
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Rank: Elder Joined: 12/4/2009 Posts: 10,804 Location: NAIROBI
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Sufficiently Philanga....thropic wrote:2nd month in a row at sub 2500 for the NSE20. And we are still 3 years away from an election. Like i said before, repealing the interest rate caps holds the key to anything above 2500. For now, it's still buying season, well.... with no end in sight.....  Let's see how prices of various counters will behave this month. Wealth is built through a relatively simple equation
Wealth=Income + Investments - Lifestyle
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Rank: Veteran Joined: 9/18/2014 Posts: 1,127
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Sufficiently Philanga....thropic wrote:2nd month in a row at sub 2500 for the NSE20. And we are still 3 years away from an election. Like i said before, repealing the interest rate caps holds the key to anything above 2500. For now, it's still buying season, well.... with no end in sight..... The NASI has already crossed the proverbial Rubicon. A small bounce then the NSE20 will crack the GFC low. The main purpose of the stock market is to make fools of as many people as possible.
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Rank: Veteran Joined: 9/18/2014 Posts: 1,127
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Sufficiently Philanga....thropic wrote:Great points @Wukan.
Well no one is forcing the banks to lend just like no one will force GoK to scrap its populist measures like Rate Caps. THE MARKETS WILL!
In 2003, when Kibaki took over the reigns of power, the banks were not lending to wanjiku and Kibaki, via then Finance CS Mwiraria(may his soul rest in peace) didn't bother forcing them to.
All they did was lower cbr (easing) and the rest is history.
The current folks at treasury are afraid of easing as this will awaken the USD bulls and there is that little issue of mounting USDloans, including the Eurobonds....and the resultant hike in the figure in KES terms.. Well the thing is, at some point, they will have to bow down to THE MARKETS!! The CRR was also regularly used by cbk as a lever to spur or curtail lending as situation demanded. That is all but dead too in the cap regime. My fear as well is that the longer the caps remain the more potent the pressure will build and the resultant snap back will blow off the lid in a furious manner. MTM bondholdings will be an ugly sight. The main purpose of the stock market is to make fools of as many people as possible.
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Rank: Veteran Joined: 9/18/2014 Posts: 1,127
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wukan wrote:I agree that at some point they will bow down to the markets especially if USD bulls rage. But it is viable politically, socially and economically to hold things constant for a decade to allow for the debt binge to balance off. Treasury's kick-the-can strategy on debt shows this as more likely.
The biggest casualty will be the poor and the emerging middle class who will stagnate for a decade because of low employment and stagnant wages. However, given the docile nature of kenya's middle class it will have little consequence for the power elite. They can pull it off. Wanjiku is easily taken in by propaganda as @Angel puts it. A decade? My guesstimate is one year tops before the market shows the way. Bond yields may have already bottomed if what is happening in the Japanese bond and US REPO markets is any kind of indicator. Overall, after retesting and exceeding the 2016 lows, negative yielding bonds are now retreating and it could be a short ride up if this is a liquidity shortage. The main purpose of the stock market is to make fools of as many people as possible.
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Rank: Elder Joined: 12/4/2009 Posts: 10,804 Location: NAIROBI
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lochaz-index wrote:Sufficiently Philanga....thropic wrote:Great points @Wukan.
Well no one is forcing the banks to lend just like no one will force GoK to scrap its populist measures like Rate Caps. THE MARKETS WILL!
In 2003, when Kibaki took over the reigns of power, the banks were not lending to wanjiku and Kibaki, via then Finance CS Mwiraria(may his soul rest in peace) didn't bother forcing them to.
All they did was lower cbr (easing) and the rest is history.
The current folks at treasury are afraid of easing as this will awaken the USD bulls and there is that little issue of mounting USDloans, including the Eurobonds....and the resultant hike in the figure in KES terms.. Well the thing is, at some point, they will have to bow down to THE MARKETS!! The CRR was also regularly used by cbk as a lever to spur or curtail lending as situation demanded. That is all but dead too in the cap regime. My fear as well is that the longer the caps remain the more potent the pressure will build and the resultant snap back will blow off the lid in a furious manner. MTM bondholdings will be an ugly sight. Kenya has no monetary policy when it comes to interest and lending rates. Jude Njomo is the policy maker not CBK nor the market Wealth is built through a relatively simple equation
Wealth=Income + Investments - Lifestyle
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Rank: Member Joined: 11/17/2018 Posts: 173 Location: Mars
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Ericsson wrote:lochaz-index wrote:Sufficiently Philanga....thropic wrote:Great points @Wukan.
Well no one is forcing the banks to lend just like no one will force GoK to scrap its populist measures like Rate Caps. THE MARKETS WILL!
In 2003, when Kibaki took over the reigns of power, the banks were not lending to wanjiku and Kibaki, via then Finance CS Mwiraria(may his soul rest in peace) didn't bother forcing them to.
All they did was lower cbr (easing) and the rest is history.
The current folks at treasury are afraid of easing as this will awaken the USD bulls and there is that little issue of mounting USDloans, including the Eurobonds....and the resultant hike in the figure in KES terms.. Well the thing is, at some point, they will have to bow down to THE MARKETS!! The CRR was also regularly used by cbk as a lever to spur or curtail lending as situation demanded. That is all but dead too in the cap regime. My fear as well is that the longer the caps remain the more potent the pressure will build and the resultant snap back will blow off the lid in a furious manner. MTM bondholdings will be an ugly sight. Kenya has no monetary policy when it comes to interest and lending rates. Jude Njomo is the policy maker not CBK nor the market No word from Uhuru yet...
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Rank: Elder Joined: 9/23/2010 Posts: 2,225 Location: Sundowner,Amboseli
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Following the Prseident's refusal to sign the Finance bill until the rate cap is done away with, September 2019's 10 year low of 2420 will be the floor.....  @SufficientlyP
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