@Tusker Baridi

We would be most obliged if you would first kindly back up your belief with reasoning and facts.

And while you are at it please also let us know why you are still interested in a country you advised everyone to flee.

Theory. A good theory. Best of wishes.

The race is not always to the swift..nor the battle always to the strong..nor food always to the wise..nor riches always to the intelligent..favor is not always to the skilled..or learned..but time and chance happens to all. Ecl9:5..

We have just had a spike. Somebody made some good money. It is now pointing south but will be back soon. The analysts and fundamentalists may keep away but for the adrenalin guys and those who fly by the seat of their pants,it is show time.
Pick your seat and clasp on your belt. It is going to be wild and fun.

Live hard,die hard.

Except for the usual suspects(mpenzi) I'm glad people are aproaching this thread with their emotions set aside. I think this global recession is godsend to those who play it right. My advice is to develop a vulture mentality; wait until the market has been shredded to bare bones and then move in to pick up the jewels from the carcass.

Meanwhile,preserve cash and dont be trigger happy,patience is key. Dont let the occassional dead cat bounce lure you back into the market. With the NSE manipulators(brokers),you cant win this game they're playing. They will try to lure you with a manipulated rally then get out before you can say sell,leaving you holding an empty bag.

I don't think what you have listed is anything less than what we expected. So to assume the magnitude of the situation is not captured by current investors/pessimists is in itself negating your argument.

Question is are you assuming the markets are yet to tank solely based on what you have listed? If so,where do you suggest one keeps/invests any disposable income?

@ectacy,I think the NSE index has not factored in the pending recession proper,that's why one needs to be very careful with one's money. As far as where to invest/park your money,I would advice anyone in Kenya to buy US dollars and just sit back and watch the shilling tank. Once you're certain the market has hit bottom(if you're lucky) then your dollar will buy more shares relative to the Kenyan shilling.

Wakanyugi,lets talk.

1. Kenya is an agricultural economy,who do you think buys our produce? Have you seen the commodity market lately? If we're now just emerging from our economic crisis as you say,then we chose to do it at the worst time.

2. What financial meltdown are you talking about,I never talked of any financial meltdown,I'm talking about global recession. China and the rest of the non Western world did not partake in the financial shenanigans but guess what,their economies are getting hit by the contangion. China,which is flush with cash and has been growing at the rate of 15%,just had its growth rate projections reduced to 6.5% by World Bank.

3. Remember when the NSE used to be for the elites,well,it never went anywhere. What ressurected the NSE from its slumber were those retail investors,not the elites. Exit retail investors and NSE is just a dead and empty exclusive club.

Wakanyugi,lets talk.

1. Kenya is an agricultural economy,who do you think buys our produce? Have you seen the commodity market lately? If we're now just emerging from our economic crisis as you say,then we chose to do it at the worst time.

Tusker B: there you go mixing oranges and bananas again. True we sell our flowers and coffee and tea in the commodities markets. But the bottom-line effect on the peasant who toils all day to grow or pick them is limited. The real impact of this selling is: a) on foreign exchange reserves which helps the government b) on the - overseas - bank accounts of the multinationals who monopolies this trade. If Kenya were a welfare state you could claim that a positive impact on government accounts would be felt by Mwananchi. But we are not and it is not. The real economic impact on majority Kenyans will not come from the cyclical commodities markets. It comes when the price of unga and maziwa increase. Yes I know urbanites will scream but believe me the farmer in Kiambu with his one cow is smiling.

2. What financial meltdown are you talking about,I never talked of any financial meltdown,I'm talking about global recession. China and the rest of the non Western world did not partake in the financial shenanigans but guess what,their economies are getting hit by the contagion. China,which is flush with cash,just had its growth rate projections reduced to 6.5% by World Bank.

China did not partake of the financial shenanigans of the rest of the world? You have been listening to Hu Jintao again haven't you? Tell me who is uncle Sam's biggest creditor? China. And is it not all this money flooding into the West from China and the Oil producing Middle East that encouraged irresponsible lending which triggered the financial melt down we are seeing? The only thing I find strange is that people have forgotten,we have been here before. After the OPEC crisis in the seventies a similar debt crisis hit the World in short order,only that time it was poor countries,not sub prime mortgage holders,who borrowed to the gills. The poor countries learned their lessons though. I could say much more on this subject but I suggest you take a look at the following titles: 'The Confessions of an Economic Hitman,' John Perkins and 'A fate Worse Than Debt,' Susan George.

Back to our humble Jamuhuri,how much in US government paper does our Central Bank hold? How much exposure do our banks have to the toxic financial produces that are killing their peers out West? Zero to none,otherwise we would have seen the write downs. UK is looking for a bogeyman to blame for the governments incompetence so of course he points to the West and cries wolf. I am surprised that you would be duped too.

3. Remember when the NSE used to be for the elites,well,it never went anywhere. What resurrected the NSE from its slumber were those retail investors,not the elites. Exit retail investors and NSE is just a dead and empty exclusive club.

I do not have the numbers here so I will not argue this point. But methinks this whole NSE,retail investor stuff is overrated. True the potential is there but we are not there yet. For instance,the US is planning to raise most of the trillions they need to fix their economy through the capital markets,much of that from the US itself. Could we ever do the same in Kenya? We recently collectively fell over in surprise when the government raised 18 billion bob through the infrastructure bond. One day we may have the same kind of Capital Markets (hopefully minus the NSE Ponzi scheme). Until then let us not baptize a cat and call it a lion.

1. This is stockskenya,not peasantskenya.

This unfortunate admission goes to confirm what I have been saying so far. SK,NSE,CMA (chose your combination of letters) represents an elitist minority (less than 1 million people) who would like us to believe they are the lifeblood of Kenya's economy. They are not. Peasantkenya is where the action happens. We only reap the benefit. Take a look at any government revenue statement and you will see I am right.

2. China lending the US dollars is not financial shenanigan,its called prudent investing..... There is a reason the dollar is gaining strength relative to other currencies,its because the US guaranteed dollar is the safest instrument in this environment.

This does not absolve the Chinese and the Arabs of responsibility for the global financial mess. It is their money that started it.

The bankers who sold sub prime mortgages and then transferred the risk to other suckers,through all manner of products,could also argue that they were practicing prudent banking. After all what is the reason for a bank's existence? It is to make money. How? By: a) working the capital entrusted to them (which they list on the debit column of their ledger,BTW) enough to make a profit and b) reducing any risk to themselves as much as possible. The Western banks did everything right but got the risk equation wrong. Kenyan banks did not play. Does that make them wise and prudent? The only reason you can say China practiced prudent investing (by off shoring their excess receipts to avoid the Dutch disease) is because they did not get caught and the Westerners,who stupidly accepted to take on what should have been China's problem,did.

So you think the US is the safest instrument to put your money in? Wait until America wakes up with a post stimulus hangover of the century and the rest of the World takes notice. Whom do you think will pay for mopping up all that money they are printing? I bet that all these trillion dollar programs will be unwound largely by exporting inflation to the rest of the World. Tell me I am wrong and prove it.

3. Now lets get back to the basics,the fundamentals of the Kenyan economy are weak and here's how the financial contagion will affect Kenya. Remember how Kenya.... well forget about that this year coz even the IMF is broke.

A clarification here. I have not denied that we have a crisis and it might get worse. But ours is a crisis of mismanagement not economic collapse. Begging from the IMF,as we have done before,reflects mismanagement on the side of our government. Why do you think they place so many conditions on their miserly loans?

And I maintain that as long as we have adequate rainfall and farmers,fishermen,market traders etc are not prevented from doing their thing,the fundamentals of Kenya's economy will remain sound.

On this I am willing to bet anything.

Some of the arguments here sound straight from the Alfred Mutua rule book.



1. The Peasant farmer will not be affected by weakening commodity prices is the biggest lie I have ever heard. If coffee,Tea and even pyrethrum prices are falling,yes that farmer you are talking about is bound to feel it big time.

There is no special agricultural economy. Most Kenyan farmers now rely on exports of products to Europe. Europe Wakanyugi is not buying.

People there did not participate in sub prime but they are wise enough to tighten their belts.

2. The NSE depends on those retail or long term investors in order to grow. The continous failure of these brokers is not endearing the market to the commoner like me.



I guess only Equity can save this mob.

3. Debt in Govt

Please read this very carefully. Kenya gov't is borrowing. I hear City hall is also bankrupt.

The gov't has a budget to take care of. It will be filled one way or another. It will raise funds for their political pet projects whether you like it or not.

If it cannot borrow from WB or IMF it will borrow locally. More bonds are going to be issued. Taxes will be increased on each and every product imaginable this year. Brace for serious tax increases.

Once they start issuing bonds,banks will reduce even more of their lending funds.

You can dismiss what you wish and bet all you want. if the gov't is starting to get broke,then Yes,the recession has yet to hit Kenya. It is just the beginning.

I totally agree with Tusker. Keep dollars,find companies that seem to understand the meaning of this is not the time to go on a spending spree.