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CBK MPC Meet!!!
Rank: Elder Joined: 7/26/2007 Posts: 6,514
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100 basis points... looks like political exuberance overtook sense... Business opportunities are like buses,there's always another one coming
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Rank: Chief Joined: 8/4/2010 Posts: 8,977
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100bps is good enough. $15/barrel oil... The commodities lehman moment arrives as well as Sovereign debt volcano!
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Rank: Elder Joined: 7/26/2007 Posts: 6,514
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Good enough for what? Its overdone...watch inflation now. Business opportunities are like buses,there's always another one coming
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Rank: Elder Joined: 1/21/2010 Posts: 6,675 Location: Nairobi
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KulaRaha wrote:Good enough for what? Its overdone...watch inflation now. CBK target for inflation is 9%! We are too far below that thus granting a rate cut... Mark 12:29
Deuteronomy 4:16
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Rank: Chief Joined: 1/13/2011 Posts: 5,964
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Look who made Zerohedge  #Wanatucheki... Kenya's Njuguna Ndung'u Shows Australia How It's Done, Cuts Rate By 100 Bps Due To "Increase In Economic Confidence" http://www.zerohedge.com...-100-bps-due-increase-ec
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Rank: Chief Joined: 8/4/2010 Posts: 8,977
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guru267 wrote:KulaRaha wrote:Good enough for what? Its overdone...watch inflation now. CBK target for inflation is 9%! We are too far below that thus granting a rate cut... Stimulus into KE econ. And as long as NPLs are raking up, CBR is going down. $15/barrel oil... The commodities lehman moment arrives as well as Sovereign debt volcano!
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Rank: Elder Joined: 9/23/2010 Posts: 2,221 Location: Sundowner,Amboseli
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Sufficiently Philanga....thropic wrote:Over to MPC. I see a reduction by 150 basis points to 8% (a bit ambitious if you ask me). With Brent checked at 101, political uncertainty at an all time low, a new administration in place, a strong/stable shilling, rains around and monthly inflation unchanged, it's all systems go. Banks will smile, money will look for Equities. 100bps cut wow! Twende kazi @SufficientlyP
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Rank: Elder Joined: 9/15/2006 Posts: 3,905
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Rank: Elder Joined: 12/4/2009 Posts: 10,702 Location: NAIROBI
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Now lets see if the banks will replicate the same with a reduction in interest rates for both secured and unsecured;the spread is more than 10% points on nearly all if not all the banks. Wealth is built through a relatively simple equation
Wealth=Income + Investments - Lifestyle
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Rank: Elder Joined: 4/22/2010 Posts: 11,522 Location: Nairobi
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Ericsson wrote:Now lets see if the banks will replicate the same with a reduction in interest rates for both secured and unsecured;the spread is more than 10% points on nearly all if not all the banks.
...i doubt possunt quia posse videntur
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Rank: Elder Joined: 7/26/2007 Posts: 6,514
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The reason why CBR was cut so aggressively was to help the govt borrow cheaper...no one cares for you and me. We will be crowded out of the credit space soon... Business opportunities are like buses,there's always another one coming
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Rank: Elder Joined: 9/23/2010 Posts: 2,221 Location: Sundowner,Amboseli
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KulaRaha wrote:The reason why CBR was cut so aggressively was to help the govt borrow cheaper...no one cares for you and me. We will be crowded out of the credit space soon... We dont intend to borrow. We intend to Invest,through savings! @SufficientlyP
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Rank: Elder Joined: 9/23/2010 Posts: 2,221 Location: Sundowner,Amboseli
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The NIM will improve hence the NAV. That's all we care about as investors @kularaha @SufficientlyP
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Rank: Elder Joined: 9/29/2006 Posts: 2,570
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Sufficiently Philanga....thropic wrote:Sufficiently Philanga....thropic wrote:Over to MPC. I see a reduction by 150 basis points to 8% (a bit ambitious if you ask me). With Brent checked at 101, political uncertainty at an all time low, a new administration in place, a strong/stable shilling, rains around and monthly inflation unchanged, it's all systems go. Banks will smile, money will look for Equities. 100bps cut wow! Twende kazi Stable shilling? http://news.google.com/n...s-idUSL6N0DO36K20130507
The opposite of courage is not cowardice, it's conformity.
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Rank: Elder Joined: 3/19/2013 Posts: 2,552
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Its a tricky play but I would have done the same.It is an opportunity for the government to borrow cheaply.I prefer a rate cut now than later especially with how commodities are right now,but that also signals a slow down in the global economy which is a problem on revenue.
Either way we can invest and consume cheap IMO.Now if banks cut their lending rates it might spur growth.The effects on the shilling,inflation and growth will be affected by so many factors.Like Aly-Khan says we're in a 'sweet spot' although the potential for it to turn sour is there.
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Rank: Elder Joined: 4/22/2010 Posts: 11,522 Location: Nairobi
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jerry wrote:Sufficiently Philanga....thropic wrote:Sufficiently Philanga....thropic wrote:Over to MPC. I see a reduction by 150 basis points to 8% (a bit ambitious if you ask me). With Brent checked at 101, political uncertainty at an all time low, a new administration in place, a strong/stable shilling, rains around and monthly inflation unchanged, it's all systems go. Banks will smile, money will look for Equities. 100bps cut wow! Twende kazi Stable shilling? http://news.google.com/n...s-idUSL6N0DO36K20130507
I will never trust this inflation figures dished out to us...they should have just let the rate remain the same...but since they have to borrow cheaply they will do everything in their means to get money (print more)... possunt quia posse videntur
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Rank: Chief Joined: 1/3/2007 Posts: 18,118 Location: Nairobi
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So which banks will cut their rates? And when? Greedy when others are fearful. Very fearful when others are greedy - to paraphrase Warren Buffett
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Rank: Elder Joined: 3/19/2013 Posts: 2,552
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Where is our inhouse wazua banker?I don't know the answer to both questions.I can only imagine that banks will try and reap profits before they adjust their rates.For now I can see two scenarios,a rise in bad debts forces them to cut their rates or using lower rates to push more loans.The latter,especially if its by the major players,might spark a rates cut.Although the problem I have with the rates cuts is that people might use this opportunity to consume(import more cars and such) and buy land without developing it waiting for it to sprout cash.Focus should be aggressively shifted to development,otherwise we'll have more government and personal debt and less revenue to pay either.
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Rank: Elder Joined: 7/26/2007 Posts: 6,514
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Sufficiently Philanga....thropic wrote:KulaRaha wrote:The reason why CBR was cut so aggressively was to help the govt borrow cheaper...no one cares for you and me. We will be crowded out of the credit space soon... We dont intend to borrow. We intend to Invest,through savings! Access to credit for industry is critical for growth... Business opportunities are like buses,there's always another one coming
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Rank: Elder Joined: 1/21/2010 Posts: 6,675 Location: Nairobi
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maka wrote:I will never trust this inflation figures dished out to us... @maka unfortunately ignorance is the biggest source of scepticism and disbelief  If you checked majority of your shopping basket you will find everything generally costs the same as this time last year! This is true all the way from bread, motor vehicles to fuel prices... I love how Kenyans religiously believe in the inflation rate when its at 19% and suddenly demonise once it falls to 4%.. Its as if our brains only comprehend bad news!! NKT...  Mark 12:29
Deuteronomy 4:16
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