Safaricom's hour of reckoning. www.nation.co.ke/busines...-/1006/998796/-/4myxr/-/

[quote=ProverB]two stories worth considering regarding technical analysis for Safaricom

http://www.businessdaily.../-/vigtrqz/-/index.html

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Have u wondered how a stock rallies after rating agencies offer downgrades and vice versa 'Fearful when all are greedy and greedy when all are fearful' - Peculiar market psychology. Rating agencies have nothing to lose even if they get their calls wrong But they rarely get their calls wrong Maybe they're selling when upgrading and buying when downgrading

My main concern is the global equities picture. Very bearish to say the least. The next selloff will be bigger than the sept 2008 - march 2009 carnage. After a downgrade of the US GDP estimate on Friday, the US fed bank is talking stimulus. Same language in japan. Europe & china cutting back (most sensible, but eurozone national defaults very likely including UK, japan & US). Well the global stimulus of 2009 failed to bring global recovery. So will another stimulus work? No it wont. In which case I expect expensive food and a war somewhere to reset this huge global debt burgen in the very near future.

@Bwana Hisah - True but in the last financial mess there was a time lag between what was happening in the eurozone and US and the African markets. The Kenyan market got a double beating due to pev. It is difficult to say when we expect the impact on our market

The drop in the price of calling charges might to many seem as the final nail on safcoms grave, but be weary of the exaggeration of the kings death.

As the price of safaricom drops there has been an increased entry by "foreign" investors who have looked at the fundamentals of the company and know that it is a good fundamental investment.

I have been looking at the statistics on the Kenyan mobile market and it is clear that a price war is likely to affect the new entrants than the incumbent. Total subscribers 19.7 million, Safaricom subscribers 15.9 million of which 11.8 million are registered with MPesa.

Forget what some guy in the UK is saying about Safaricom, they are the same ones who recommended that foreign investors should exit due to the expected downturn as a result of expected violence during the referendum.

Learn to make your own decisions based on your understanding and knowledge of a market. Dumping safaricom because of the price drop is like dumping breweries because you saw a guy get drunk on a beer and fall into a ditch.