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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: 18,347
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: 2,225
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: 2,225
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: 1,654
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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