The NSE20 tumbled by 2% to close at 3645, as a Global sell of equities ensued as investors exited emerging stocks and rushed to safe havens such as Gold after the U.S debt was downgrade by Standard and Poors over the weekend, the U.S lost its top notch AAA rating. The shilling fell to a fresh all time low against the USD, in fact last time i checked it was trading at 93.5 against the Green Buck.
I argue investors to trade with caution in this tough times, its time to get defensive sell off all those stocks trading on ultra high PE's, avoid penny stocks and get into counters trading on trailing or forward PE's less than 5 and those with high dividend yields, in short this is not the time to speculate and CASH is King , i expect shares mostly traded or widely held by foreigners such as Safaricom, KCB, Equity Bank and Kenya Airways to continue tumbling down as the global sell off ensues, foreign investors have been dealt a double blow-global events and the hemorrhaging shilling to be precise, the falling shilling has left them nursing huge forex losses on their portfolio's while local investors have been stung by super inflation. The key psychological mark to watch now is 3500. The sell off i never anticipated and it only points we are headed to a period of uncertainty characterized by global stagflation and local politics.
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