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Market Direction with Election
Rank: Elder Joined: 6/23/2009 Posts: 13,530 Location: nairobi
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VituVingiSana wrote:Aguytrying wrote:Remember last year many were of the opinion that they will wait to buy stocks after elections. But stocks don't follow common logic most of the time. Same thing happened in 2012. Against crowd sentiments. I can hardly believe some of the gains I am making. KK almost 100% profit!  Unlike one who wanted us to buy KQ! Lol.. KK has indeed outdone itself this year
HF 90,000 ABP 3.83; KQ 414,100 ABP 7.92; MTN 23,800 ABP 6.45
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Rank: Veteran Joined: 9/18/2014 Posts: 1,127
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Aguytrying wrote:Do not be suckered into the current rally. If u bought before when prices were low fine. When excitement dies down most these prices will reset before the next true rise Few will listen as euphoria takes over seeing as any stock pick appears inspired/stroke of genius. 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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Aguytrying wrote:Remember last year many were of the opinion that they will wait to buy stocks after elections. But stocks don't follow common logic most of the time. Same thing happened in 2012. Against crowd sentiments. I can hardly believe some of the gains I am making. KK almost 100% profit! My teflon suit during the two year downturn. Will be looking for an exit if this rally gets into gets into irrational territory. The main purpose of the stock market is to make fools of as many people as possible.
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Rank: Member Joined: 9/14/2011 Posts: 834 Location: nairobi
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lochaz-index wrote:Aguytrying wrote:Remember last year many were of the opinion that they will wait to buy stocks after elections. But stocks don't follow common logic most of the time. Same thing happened in 2012. Against crowd sentiments. I can hardly believe some of the gains I am making. KK almost 100% profit! My teflon suit during the two year downturn. Will be looking for an exit if this rally gets into gets into irrational territory. @Lochaz, what is your take on the banking stocks? My gut feeling is that the rates cap will be dropped or atleast modified in some way while the way the elections have gone has brought about a feel good factor, i worry that the economy is not doing well at all and generally earnings for most companies will continue being poor atleast compared to previous years
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Rank: Veteran Joined: 9/18/2014 Posts: 1,127
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heri wrote:lochaz-index wrote:Aguytrying wrote:Remember last year many were of the opinion that they will wait to buy stocks after elections. But stocks don't follow common logic most of the time. Same thing happened in 2012. Against crowd sentiments. I can hardly believe some of the gains I am making. KK almost 100% profit! My teflon suit during the two year downturn. Will be looking for an exit if this rally gets into gets into irrational territory. @Lochaz, what is your take on the banking stocks? My gut feeling is that the rates cap will be dropped or atleast modified in some way while the way the elections have gone has brought about a feel good factor, i worry that the economy is not doing well at all and generally earnings for most companies will continue being poor atleast compared to previous years You are right on the economy. It is still in deterioration mode which will take need structural fixes to mend the damage. The elections turned out to be a non-event as per my previous assessment however I don't trust this rally one bit. For one, it is not KE specific or KE founded but rather is part of the global risk on strategy(have a look at the Ghana or Nigeria stock exchanges for comparison). That means the correlation between the current NSE charge and international events is unusually high. Those events can turn on a dime. Caution is of utmost importance here. Interest caps were instituted to help manage the government's fiscal risk not to aid advancing of credit to Wanjiku. That decision has handicapped the private sector a great deal and thereby impacting on the economy's growth. At this point, KE govt needs those caps regardless of the economic consequences so I wouldn't expect a repeal...maybe a modification. The fiscal fireworks over the next one year pose the greatest risk to both the economy and the market. As for the banks, if I had a significant position in any of them I would be plotting my exit. NPLs will continue to grow, IFRS9 kicks in beginning 2018, if Tbill/bond yields turn the corner as I expect them to, banks' bond portfolios will take massive haircuts. The main purpose of the stock market is to make fools of as many people as possible.
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Rank: Member Joined: 4/14/2010 Posts: 806 Location: Nairobi
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lochaz-index wrote:heri wrote:lochaz-index wrote:Aguytrying wrote:Remember last year many were of the opinion that they will wait to buy stocks after elections. But stocks don't follow common logic most of the time. Same thing happened in 2012. Against crowd sentiments. I can hardly believe some of the gains I am making. KK almost 100% profit! My teflon suit during the two year downturn. Will be looking for an exit if this rally gets into gets into irrational territory. @Lochaz, what is your take on the banking stocks? My gut feeling is that the rates cap will be dropped or atleast modified in some way while the way the elections have gone has brought about a feel good factor, i worry that the economy is not doing well at all and generally earnings for most companies will continue being poor atleast compared to previous years You are right on the economy. It is still in deterioration mode which will take need structural fixes to mend the damage. The elections turned out to be a non-event as per my previous assessment however I don't trust this rally one bit. For one, it is not KE specific or KE founded but rather is part of the global risk on strategy(have a look at the Ghana or Nigeria stock exchanges for comparison). That means the correlation between the current NSE charge and international events is unusually high. Those events can turn on a dime. Caution is of utmost importance here. Interest caps were instituted to help manage the government's fiscal risk not to aid advancing of credit to Wanjiku. That decision has handicapped the private sector a great deal and thereby impacting on the economy's growth. At this point, KE govt needs those caps regardless of the economic consequences so I wouldn't expect a repeal...maybe a modification. The fiscal fireworks over the next one year pose the greatest risk to both the economy and the market. As for the banks, if I had a significant position in any of them I would be plotting my exit. NPLs will continue to grow, IFRS9 kicks in beginning 2018, if Tbill/bond yields turn the corner as I expect them to, banks' bond portfolios will take massive haircuts. Not too sure that Banks are loading on more 'risky' loans given the credit freeze being experienced. So the rate of increase in NPL should ideally be decreasing. And for loans on board...with lower interest rates...borrowers should be having an easier time repaying...translating to lower NPLs. In terms of IFRS9...given that banks have had advance warnings of this statute, I would expect them to have realigned their government bond portfolios to minimise a possible hit. By yields turning the corner..I assume that you predict interest rates rising significantly above coupon rates of government bonds and hence a decline in fair values of bond portfolios. Possibility of this is dependent on the very same government that has been holding the interest rates at generally the same level over the last year...And as you said the caps are to serve gok getting cheaper funds...am highly doubtful that gok will allow those crazy rates of circa 20% seen in 2015. It could be awhile before yields turn a corner...Just my opinion.
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Rank: Veteran Joined: 9/18/2014 Posts: 1,127
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winston wrote:lochaz-index wrote:heri wrote:lochaz-index wrote:Aguytrying wrote:Remember last year many were of the opinion that they will wait to buy stocks after elections. But stocks don't follow common logic most of the time. Same thing happened in 2012. Against crowd sentiments. I can hardly believe some of the gains I am making. KK almost 100% profit! My teflon suit during the two year downturn. Will be looking for an exit if this rally gets into gets into irrational territory. @Lochaz, what is your take on the banking stocks? My gut feeling is that the rates cap will be dropped or atleast modified in some way while the way the elections have gone has brought about a feel good factor, i worry that the economy is not doing well at all and generally earnings for most companies will continue being poor atleast compared to previous years You are right on the economy. It is still in deterioration mode which will take need structural fixes to mend the damage. The elections turned out to be a non-event as per my previous assessment however I don't trust this rally one bit. For one, it is not KE specific or KE founded but rather is part of the global risk on strategy(have a look at the Ghana or Nigeria stock exchanges for comparison). That means the correlation between the current NSE charge and international events is unusually high. Those events can turn on a dime. Caution is of utmost importance here. Interest caps were instituted to help manage the government's fiscal risk not to aid advancing of credit to Wanjiku. That decision has handicapped the private sector a great deal and thereby impacting on the economy's growth. At this point, KE govt needs those caps regardless of the economic consequences so I wouldn't expect a repeal...maybe a modification. The fiscal fireworks over the next one year pose the greatest risk to both the economy and the market. As for the banks, if I had a significant position in any of them I would be plotting my exit. NPLs will continue to grow, IFRS9 kicks in beginning 2018, if Tbill/bond yields turn the corner as I expect them to, banks' bond portfolios will take massive haircuts. Not too sure that Banks are loading on more 'risky' loans given the credit freeze being experienced. So the rate of increase in NPL should ideally be decreasing. And for loans on board...with lower interest rates...borrowers should be having an easier time repaying...translating to lower NPLs. In terms of IFRS9...given that banks have had advance warnings of this statute, I would expect them to have realigned their government bond portfolios to minimise a possible hit. By yields turning the corner..I assume that you predict interest rates rising significantly above coupon rates of government bonds and hence a decline in fair values of bond portfolios. Possibility of this is dependent on the very same government that has been holding the interest rates at generally the same level over the last year...And as you said the caps are to serve gok getting cheaper funds...am highly doubtful that gok will allow those crazy rates of circa 20% seen in 2015. It could be awhile before yields turn a corner...Just my opinion. Let me elaborate a little on the NPLs issue. Rising NPLs are not only dependent on the rate of interest rates, in the case of KE that risk is minimal or nonexistent thanks to the caps. It is almost a year since the caps were enacted yet NPLs continue to rise...that trend is explained by partly by macro risk and partly by lack of refi loans or O/D facilities. I expect the same to continue as long as the spread between tbills/bonds and Wanjiku lending rates is razor thin. I am yet to see any provisions on potential IFRS9 changes by any of the banks. GoK can keep the yields on tbill/bonds low as long as the market trend is permissible of the notion and that the government keeps its debt appetite in check. The latter has not been happening and the trend of the former has a short shelf in the current set up. The main purpose of the stock market is to make fools of as many people as possible.
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Rank: Elder Joined: 6/23/2009 Posts: 13,530 Location: nairobi
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lochaz-index wrote:winston wrote:lochaz-index wrote:heri wrote:lochaz-index wrote:Aguytrying wrote:Remember last year many were of the opinion that they will wait to buy stocks after elections. But stocks don't follow common logic most of the time. Same thing happened in 2012. Against crowd sentiments. I can hardly believe some of the gains I am making. KK almost 100% profit! My teflon suit during the two year downturn. Will be looking for an exit if this rally gets into gets into irrational territory. @Lochaz, what is your take on the banking stocks? My gut feeling is that the rates cap will be dropped or atleast modified in some way while the way the elections have gone has brought about a feel good factor, i worry that the economy is not doing well at all and generally earnings for most companies will continue being poor atleast compared to previous years You are right on the economy. It is still in deterioration mode which will take need structural fixes to mend the damage. The elections turned out to be a non-event as per my previous assessment however I don't trust this rally one bit. For one, it is not KE specific or KE founded but rather is part of the global risk on strategy(have a look at the Ghana or Nigeria stock exchanges for comparison). That means the correlation between the current NSE charge and international events is unusually high. Those events can turn on a dime. Caution is of utmost importance here. Interest caps were instituted to help manage the government's fiscal risk not to aid advancing of credit to Wanjiku. That decision has handicapped the private sector a great deal and thereby impacting on the economy's growth. At this point, KE govt needs those caps regardless of the economic consequences so I wouldn't expect a repeal...maybe a modification. The fiscal fireworks over the next one year pose the greatest risk to both the economy and the market. As for the banks, if I had a significant position in any of them I would be plotting my exit. NPLs will continue to grow, IFRS9 kicks in beginning 2018, if Tbill/bond yields turn the corner as I expect them to, banks' bond portfolios will take massive haircuts. Not too sure that Banks are loading on more 'risky' loans given the credit freeze being experienced. So the rate of increase in NPL should ideally be decreasing. And for loans on board...with lower interest rates...borrowers should be having an easier time repaying...translating to lower NPLs. In terms of IFRS9...given that banks have had advance warnings of this statute, I would expect them to have realigned their government bond portfolios to minimise a possible hit. By yields turning the corner..I assume that you predict interest rates rising significantly above coupon rates of government bonds and hence a decline in fair values of bond portfolios. Possibility of this is dependent on the very same government that has been holding the interest rates at generally the same level over the last year...And as you said the caps are to serve gok getting cheaper funds...am highly doubtful that gok will allow those crazy rates of circa 20% seen in 2015. It could be awhile before yields turn a corner...Just my opinion. Let me elaborate a little on the NPLs issue. Rising NPLs are not only dependent on the rate of interest rates, in the case of KE that risk is minimal or nonexistent thanks to the caps. It is almost a year since the caps were enacted yet NPLs continue to rise...that trend is explained by partly by macro risk and partly by lack of refi loans or O/D facilities. I expect the same to continue as long as the spread between tbills/bonds and Wanjiku lending rates is razor thin. I am yet to see any provisions on potential IFRS9 changes by any of the banks. GoK can keep the yields on tbill/bonds low as long as the market trend is permissible of the notion and that the government keeps its debt appetite in check. The latter has not been happening and the trend of the former has a short shelf in the current set up. Eish. You must be a member of the MPC. That's a well worded post
HF 90,000 ABP 3.83; KQ 414,100 ABP 7.92; MTN 23,800 ABP 6.45
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Rank: Member Joined: 4/14/2010 Posts: 806 Location: Nairobi
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obiero wrote:lochaz-index wrote:winston wrote:lochaz-index wrote:heri wrote:lochaz-index wrote:Aguytrying wrote:Remember last year many were of the opinion that they will wait to buy stocks after elections. But stocks don't follow common logic most of the time. Same thing happened in 2012. Against crowd sentiments. I can hardly believe some of the gains I am making. KK almost 100% profit! My teflon suit during the two year downturn. Will be looking for an exit if this rally gets into gets into irrational territory. @Lochaz, what is your take on the banking stocks? My gut feeling is that the rates cap will be dropped or atleast modified in some way while the way the elections have gone has brought about a feel good factor, i worry that the economy is not doing well at all and generally earnings for most companies will continue being poor atleast compared to previous years You are right on the economy. It is still in deterioration mode which will take need structural fixes to mend the damage. The elections turned out to be a non-event as per my previous assessment however I don't trust this rally one bit. For one, it is not KE specific or KE founded but rather is part of the global risk on strategy(have a look at the Ghana or Nigeria stock exchanges for comparison). That means the correlation between the current NSE charge and international events is unusually high. Those events can turn on a dime. Caution is of utmost importance here. Interest caps were instituted to help manage the government's fiscal risk not to aid advancing of credit to Wanjiku. That decision has handicapped the private sector a great deal and thereby impacting on the economy's growth. At this point, KE govt needs those caps regardless of the economic consequences so I wouldn't expect a repeal...maybe a modification. The fiscal fireworks over the next one year pose the greatest risk to both the economy and the market. As for the banks, if I had a significant position in any of them I would be plotting my exit. NPLs will continue to grow, IFRS9 kicks in beginning 2018, if Tbill/bond yields turn the corner as I expect them to, banks' bond portfolios will take massive haircuts. Not too sure that Banks are loading on more 'risky' loans given the credit freeze being experienced. So the rate of increase in NPL should ideally be decreasing. And for loans on board...with lower interest rates...borrowers should be having an easier time repaying...translating to lower NPLs. In terms of IFRS9...given that banks have had advance warnings of this statute, I would expect them to have realigned their government bond portfolios to minimise a possible hit. By yields turning the corner..I assume that you predict interest rates rising significantly above coupon rates of government bonds and hence a decline in fair values of bond portfolios. Possibility of this is dependent on the very same government that has been holding the interest rates at generally the same level over the last year...And as you said the caps are to serve gok getting cheaper funds...am highly doubtful that gok will allow those crazy rates of circa 20% seen in 2015. It could be awhile before yields turn a corner...Just my opinion. Let me elaborate a little on the NPLs issue. Rising NPLs are not only dependent on the rate of interest rates, in the case of KE that risk is minimal or nonexistent thanks to the caps. It is almost a year since the caps were enacted yet NPLs continue to rise...that trend is explained by partly by macro risk and partly by lack of refi loans or O/D facilities. I expect the same to continue as long as the spread between tbills/bonds and Wanjiku lending rates is razor thin. I am yet to see any provisions on potential IFRS9 changes by any of the banks. GoK can keep the yields on tbill/bonds low as long as the market trend is permissible of the notion and that the government keeps its debt appetite in check. The latter has not been happening and the trend of the former has a short shelf in the current set up. Eish. You must be a member of the MPC. That's a well worded post @Obiero. True dat  @lochaz - Thanks I stand educated on NPL's. On IFRS9 you may not see effect since banks can sell out a bond that is under an unfavourable classification and buy a similar one (or the same one. sell and buy back) under a favourable classification. Impact on P&L will be minimal. On yields...I agree but its not entirely certain. But chances are the rates will start going up since money will start flowing out of bonds into the stock market and the decreased available liquidity may lead to rates shifting upwards.
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Rank: Chief Joined: 1/3/2007 Posts: 18,118 Location: Nairobi
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After we learnt about banks exposed to KQ, there is Nakumatt too! Now comes RVR. Lots of NPLs on the way! Which local banks are exposed to RVR? Greedy when others are fearful. Very fearful when others are greedy - to paraphrase Warren Buffett
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Rank: Member Joined: 9/14/2011 Posts: 834 Location: nairobi
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VituVingiSana wrote:After we learnt about banks exposed to KQ, there is Nakumatt too! Now comes RVR.
Lots of NPLs on the way!
Which local banks are exposed to RVR?
where is that mentioned?
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Rank: Elder Joined: 12/4/2009 Posts: 10,701 Location: NAIROBI
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VituVingiSana wrote:After we learnt about banks exposed to KQ, there is Nakumatt too! Now comes RVR.
Lots of NPLs on the way!
Which local banks are exposed to RVR?Equity Bank
Wealth is built through a relatively simple equation
Wealth=Income + Investments - Lifestyle
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Rank: Elder Joined: 12/4/2009 Posts: 10,701 Location: NAIROBI
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Market correction underway Wealth is built through a relatively simple equation
Wealth=Income + Investments - Lifestyle
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Rank: Elder Joined: 9/20/2015 Posts: 2,811 Location: Mombasa
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Ericsson wrote:Market correction underway Will it be a brutal one? John 5:17 But Jesus replied, “My Father is always working, and so am I.”
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Rank: Member Joined: 4/14/2010 Posts: 806 Location: Nairobi
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Ericsson wrote:Market correction underway As expected...but thereafter the trudge uphill will resume.
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Rank: Elder Joined: 12/4/2009 Posts: 10,701 Location: NAIROBI
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Spikes wrote:Ericsson wrote:Market correction underway Will it be a brutal one? On some counters Wealth is built through a relatively simple equation
Wealth=Income + Investments - Lifestyle
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Rank: Elder Joined: 7/21/2010 Posts: 6,183 Location: nairobi
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Ericsson wrote:Market correction underway Filling the gaps,i don't see how I can sell when I weathered a very severe bear,Good times are coming in the next three years of certainty .2018 is the great harvesting year,i won't chase after any squirrel instead Iam positioning for the elephant "Don't let the fear of losing be greater than the excitement of winning."
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Rank: Veteran Joined: 7/1/2014 Posts: 903 Location: sky
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mlennyma wrote:Ericsson wrote:Market correction underway Filling the gaps,i don't see how I can sell when I weathered a very severe bear,Good times are coming in the next three years of certainty .2018 is the great harvesting year,i won't chase after any squirrel instead Iam positioning for the elephant exactly @mlennyma i dont see how one can sell after taking election risk, that risk should be rewarded handsomely through more patience There are only two emotions in the stock market, fear and hope. The problem is, you hope when you should fear and fear when you should hope
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Rank: Veteran Joined: 3/26/2012 Posts: 985 Location: Dar es salaam,Tanzania
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littledove wrote:mlennyma wrote:Ericsson wrote:Market correction underway Filling the gaps,i don't see how I can sell when I weathered a very severe bear,Good times are coming in the next three years of certainty .2018 is the great harvesting year,i won't chase after any squirrel instead Iam positioning for the elephant exactly @mlennyma i dont see how one can sell after taking election risk, that risk should be rewarded handsomely through more patience Yes..The medium term trend is bullish This is just a correction
“The pessimist complains about the wind; the optimist expects it to change; the realist adjusts the sails.”
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Rank: Veteran Joined: 8/10/2014 Posts: 976 Location: Kenya
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littledove wrote:mlennyma wrote:Ericsson wrote:Market correction underway Filling the gaps,i don't see how I can sell when I weathered a very severe bear,Good times are coming in the next three years of certainty .2018 is the great harvesting year,i won't chase after any squirrel instead Iam positioning for the elephant exactly @mlennyma i dont see how one can sell after taking election risk, that risk should be rewarded handsomely through more patience I sold...will go back in when the prices are lower then wait for the next market excitement
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