I gave this two explanations why the market will not react or sell some...

http://www.wazua.co.ke/f...amp;m=149655#post149655

http://www.wazua.co.ke/f...&m=152171#post152171

@mkonomtupu - at the moment I'm more concerned with the behaviour of global oil and global food prices. If this two don't slow down soon, I expect financial markets especially equities to catch a cold. Whether stocks are cheap or expensive, wild oil prices always have a way of raising the red flag on global economy growth, which means bets off on financial markets. I am watching these 2 central banks (US Fed and ECB) to determine which way to go. If ECB hikes rates (very likely) it will feel like March 2008 - end of stimulus or easy money/credit.

Locally watch the inflation rate. If it shoots through 6% and oil prices are still high with a weak shilling, NSE will under perform since the GDP growth will also slow down. If the USD/KES rate hits 90 - I'll be out of stocks completely and troop to the money markets for higher interest rates.

me too

http://www.businessdaily...6/-/2d0kp3/-/index.html

Inflation rate officially above 6%. Far higher than I had expected and quite a spike above the CBR. MPC has eggs in the face for stating inflation will be contained below 5% limit yet they keep on lowering the CBR. But I'm happy the fraud in the inflation model is getting exposed. But do we expect from gubberment. Last time when maize flour spike above 100, we had 2 prices - one for poor & one for rich fellows. Well, we all know how the story ended. Now we have fuel control. We will see how it ends if history is an indicator.
I'm revising my outrageous 7% target to 9% in the next quarter. This is bad for equities.

@scubidu - where at thou we discuss this inflation hedonics fraud models practised by gubberment. Did u see china did the same this jan and even admitted furging the CPI to manipulate inflation figures. I expect the shanghai & hangseng to lead the rest of global stocks lower as inflation esp real estate blows out of utopia just like europe & US in 2007.

@Hisah now update us on this 9% inflation which you indicated would come in Q2 and its effect on equities. Is it just temporary or is this the shocker like 1993-1994. I'm thinking if it keeps up at this pace banks are going to get plenty of defaults soon. I'm a simpleton from mashinani so try also explain

The east african economy is unable to go into recession even if it tried..

What the NSE is going through is merely a rough patch..
Financial Equities are trading at ridiculously low valuations and I would recomend them as buys... These are getting major business from the government and corporates so they are unlikely to be affected by reduction in disposable income..

Im kind of bearish on industrials except the monopolies like KPLC and BAT because their input costs must be becoming a hassle.

At these prices financial stocks & KPLC & BAT are offering returns equal to the money market so why buy bonds??

When the 2012 elections do go peacefully and it is evident we are on track for vision 2030 then the NSE will smell the coffee..

I just hope you are positioned well for the 15 year bull that will ensue after 2012

Point of correction @the deal, you as a foreigner living or schooling in Kenya are not foreign investors in the true sense of the word as you spend in ksh.

The foreign investors he is referring to are non resident foreigners like me that bring in 100 USD that will baloon to almost 9000 Ksh wheras 4 years ago it was barely 6000 Ksh.

Also as a long term investor (apologies to you) I do not need the repartriate the proceeds immediately, my 9000 Ksh would have compunded over years due to the growth of stock price and dividend income and i may be lucky the exchange rate may be 90 Ksh to a dollar then.

The beauty of investing accross boarders !

@young i might be here but 100% of my funds come from home...so i'm just like you...i plan to exit the Kenyan market over the coarse of the year...i'm a firm believer in the Namibian economy...its well diversified unlike Botswana we dont solely depend on diamonds...its well managed...there is political stability...i believe the economy will growth average 4.8-6% every year over the the next 5-10 years barring any recession...thats where i wanna go long term not here..so in Kenya i speculate with all my portifolio and repertriate the gains thats what all the foreign investors are doing...that strategy has worked supeer fine for me thus far...unless there is political stability in Kenya i will never go long term...mention 2012 to anyone here they get scared...i came to Kenya in 2007 in October and 2 month down the line Kenya was burning and the NSE was on its knees...i dont want any of that.

I'm with @guru on the bullish east african economy after 2012. Uganda is currently arguing with tullow on the amount of oil to be produced per day, tullow wants to produce 200,000 barrels per day by 2015 (that's $2billion dollars a day) for the next 25 years and uganda thinks that will shock the economies of east africa economies. Heck even somalia is looking bullish flights to mogadishu are fully booked. I just hope raila if he gets elected will not pick up fights with M7, the stakes for 2012 are high.

@deal, where do you think you are going, we need your analysis some of us can't do numbers. But i love the pessimism it's always time to buy on low valuations