Nipate
Forum => Kenya Discussion => Topic started by: Omollo on January 20, 2017, 01:14:57 PM
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I am waiting to hear the spin about this one. If the economy is doing so well and growth is hitting the roof, why are investors running away instead of cashing in on it?
Instead the vultures are running for public debt. They see a broke country willing to accept Shylock loans at crazy interest rates.
Bloomberg has released a report indicating that Kenyan stock prices at more than three-year lows.
The report also indicates that the stock prices will fall further as domestic investors favor bonds while the foreign buyers wait for lower valuations.
Since January 1 shares on the Nairobi Securities Exchange have dropped 6.9 percent. This is a decline from last year’s 8.5 percent.
Investors at the Nairobi Securities Exchange (NSE) lost over a Sh100 billion in 2016 after a majority of stocks across all counters saw their values eroded. This as the market sustained a bear run - a period of time when prices fall on a financial market - that was also experienced in 2015.
ALSO READ: Market regulator banks on small investors to lift bourse fortunes
The bourse closed the year with the bench mark index - the NSE 20 share index - losing 21 per cent to settle at 3186.21 points,” said NSE in the report. BIGGEST MOVERS The 20 share index is a price weight index calculated as a mean of the 20 largest stocks by capitalisation. The NSE report also noted that equity turnover declined by 30 per cent to Sh147 billion from Sh209 billion posted in 2015. Annual trading volumes decreased to 5.8 billion shares, down from 7.3 billion shares posted the previous year. Safaricom and Equity Bank were the stocks that registered the highest activities in the market over the year. Safaricom was the biggest mover with 2.3 billion shares valued at Sh43.4 billion changing hands while Equity Group’s 717 million shares valued at Sh25.8 billion were traded in 2016.
Read more at: https://www.standardmedia.co.ke/business/article/2000228610/investors-burn-their-fingers-again-as-sh100b-lost-at-nse
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The NSE average has performed dismally this year the 20 days so far. The main culprit is the financial sector. The capping of interest spread has reduced banks profits while at the same time raised interest cost of deposits. If it weren't for the financial sector, banking and insurance NSE would be positive. But we also need to note that NSE only has about 60 listed companies and most of them aren't the biggest company in their sector. Bidco,kapa oil,kenafric industries, menengai refeneries, flower companies, mini bakeries, nakumatt etc aren't listed. The economy is facing some serious headwinds like drought( which will mean high energy cost apart from food), limited credit expansion and obviously election jitters.
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meanwhile USA stock market is smoking. The reaction to less regulation is very good and this is one aspect that kenyans should exploit to boost their retirement funds.
HK,
May be you should come back and make a few millions dollars and you can resume the Kenyan hustle after Raila loses power in 2022
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Less regulation as long as it benefits the middle class.
Rethuglicans want to milk the middle to give it to the richest.
meanwhile USA stock market is smoking. The reaction to less regulation is very good and this is one aspect that kenyans should exploit to boost their retirement funds.
HK,
May be you should come back and make a few millions dollars and you can resume the Kenyan hustle after Raila loses power in 2022
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Unitl the get rid of interest rate caps the economy is going to shrink.
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meanwhile USA stock market is smoking. The reaction to less regulation is very good and this is one aspect that kenyans should exploit to boost their retirement funds.
HK,
May be you should come back and make a few millions dollars and you can resume the Kenyan hustle after Raila loses power in 2022
First of all lets not get carried away . Dow is up about 10% after election of Trump but has since stagnated unable to crack the 20000 mark for weeks now. The broader index the S&P 500 is only up 5%. If Trump can lower taxes and ease regulation the economy will grow at healthy rate, america economy is so dynamic it doesn't need much .
Personally there's no where else I'd rather be, Kenya has ridiculous opportunities in almost all the sectors. There are opportunities everywhere from manufacturing to technology. So the only reason to go to america is for a holiday or most likely to buy equipment, or better yet to market our products. As for Raila winning, wait for the registration figures after one month then you'll realize he doesn't have a chance.
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Let me try to understand what some of you are saying: If thievery by shylock banks is stopped then the NSE suffers a near fatal blow. Is it then right to say the NSE has been living high on squeezing every last coin from the general population and the capping of interests did slow them down ( I understand the interest rates are on the ascent thanks to Rotich's accelerated domestic borrowing).
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Omollo,
It is fiscal policy stupid. The move to cap interest rates was stupid because gok can cap rates using other market tools. I do not understand momentary theory well to discuss.
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Let me try to understand what some of you are saying: If thievery by shylock banks is stopped then the NSE suffers a near fatal blow. Is it then right to say the NSE has been living high on squeezing every last coin from the general population and the capping of interests did slow them down ( I understand the interest rates are on the ascent thanks to Rotich's accelerated domestic borrowing).
Earnings drive price of shares, so when earnings of companies goes down or are perceived to be going down, the shares take a beating. NSE is heavily weighted on financial sector which is being disrupted by technology and capping of rates. So if shares of banks go down the NSE average goes down. Some banks like equity bank have completely retooled and are seeing explosive growth in mobile money banking which augurs very well for their future earnings(stock).