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Kenya Economy Watch
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mwekez@ji
#331 Posted : Wednesday, September 04, 2013 9:48:19 AM
Rank: Chief

Joined: 5/31/2011
Posts: 5,121
hisah wrote:
Scubidu wrote:
I'm sure they're expecting eurobond inflows to stabilize the shilling as the VAT bill wrecks all sort of havoc. It's a gamble with the hold decision but everyone knows you must always stack the cards in your favour to generate the desired outcome. The case of fuzzy (fudged) inflation stats that influenced the decision. The core inflation figure aka non-food-non-fuel supposedly went down (3.86) according to the MPC statement leading to the assumption that there were no demand driven factors in play in August. But when you go to the statistic bureau website (www.knbs.or.ke) and download the latest CPI it's a conflicting story.

Food and fuel indices (2 items)

Food - 9.74
Housing, water, fuel - 4.58

Headline inflation - 6.67

Non-food-non-fuel (10 items)

Alcoholic beverages - 6.10
Clothing and footwear - 4.79
Furnishings - 3.62
Health - 4.33
Transport - 6.66
Communication - 3.62 (minus)
Recreation and culture - 3.87
Education - 4.83
Restaurant and hotel - 6.98
Miscellaneous - 4.47

Core inflation - 3.86?

The law of averages is simple. The average can't be statistically lower than the sum of its parts. Thus core inflation can't be 3.86 based on the 10 items above that form it. Yet this figure is the evidence of the declining threat from demand driven inflation.

The core inflation gimmick d'oh!

I still expect treasury to put out a $2 billion eurobond if the market permits it.


d'oh! @Scubidu @Hisah, aint all those items >6% food and fuel items save for housing? .... $2B eurobond is welcomed
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Scubidu
#332 Posted : Wednesday, September 04, 2013 10:44:48 AM
Rank: Veteran

Joined: 9/4/2009
Posts: 700
Location: Nairobi
Turns out the restaurant & hotel index is no longer a core inflation item. so that's why the core inflation number is 3.86. Apparently the costs of restaurants & hotels is so close to food and housing that it gets excluded d'oh! . I don't get the logic.

Yeah i think we can absorb $2bln, mind you we still have a syndicated loan to pay off early next year.
“We are the middle children of history man, no purpose or place. We have no great war, no great depression. Our great war is a spiritual war, our great depression is our lives!" – Tyler Durden
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kizee1
#333 Posted : Wednesday, September 04, 2013 11:20:20 AM
Rank: Member

Joined: 9/29/2010
Posts: 679
Location: nairobi
how will this eurobond work? will funds be directly used to pay for fcy projects as they claim or will it be used to fund budget deficits in which case how will it be repaid? ama it will keep being rolled over and only coupons repaid until we sell some oil?
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Scubidu
#334 Posted : Wednesday, September 04, 2013 8:34:45 PM
Rank: Veteran

Joined: 9/4/2009
Posts: 700
Location: Nairobi
kizee1 wrote:
how will this eurobond work? will funds be directly used to pay for fcy projects as they claim or will it be used to fund budget deficits in which case how will it be repaid? ama it will keep being rolled over and only coupons repaid until we sell some oil?


The eurobond will be rolled over until something else can replace it. Partly used to redeem the previous bank loan and the remainder converted for local road projects. Don't know what it'll mean for debt sustainability too take usd 2 billion in one go.
“We are the middle children of history man, no purpose or place. We have no great war, no great depression. Our great war is a spiritual war, our great depression is our lives!" – Tyler Durden
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washiku
#335 Posted : Wednesday, September 04, 2013 10:14:49 PM
Rank: Chief

Joined: 5/9/2007
Posts: 13,095
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ecstacy
#336 Posted : Wednesday, September 04, 2013 10:33:21 PM
Rank: Elder

Joined: 2/26/2008
Posts: 4,449
washiku wrote:
An oil prospecting firm in Kenya's northern Lokichar basin has announced a five-fold increase in its estimates of oil reserves in the area.


Applause Applause This is great news. Let us pray for wisdom for our leaders whilst tightening that Mining Bill. If we go the Norwegian route, KE is destined for greatness in this region.
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kizee1
#337 Posted : Thursday, September 05, 2013 2:17:58 PM
Rank: Member

Joined: 9/29/2010
Posts: 679
Location: nairobi
this is quite something!

If these were to be all proven Kenya would be rank among the top oil producers in sub-Saharan Africa, with Nigeria's proven estimates at 37 billion barrels, while those of Angola, the second top producer, are at 10 billion barrels....report says the estimated reserves at lokichar alone are 20billion! twice that of angola!!
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josimar
#338 Posted : Thursday, September 05, 2013 3:33:27 PM
Rank: Member

Joined: 7/6/2010
Posts: 242
The most important thing is to have the oil resources utilized well. We already have foreign income earners from Tea , coffee and tourism. What baffles me todate is why the roads in the tea growing areas are very bad , just pay a visit to KTDA factories in Meru area and You will witness this. Masai Mara brings revenue to Narok county yet the roads leading there are horrible. Look at the roads in Mombasa tourist areas. Therefore , I would not want to sound a sadist but I highly doubt even with revenues from oil Our lifes will not change.
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mkeiyd
#339 Posted : Thursday, September 05, 2013 4:38:04 PM
Rank: Veteran

Joined: 3/26/2012
Posts: 1,182
josimar wrote:
The most important thing is to have the oil resources utilized well. We already have foreign income earners from Tea , coffee and tourism. What baffles me todate is why the roads in the tea growing areas are very bad , just pay a visit to KTDA factories in Meru area and You will witness this. Masai Mara brings revenue to Narok county yet the roads leading there are horrible. Look at the roads in Mombasa tourist areas. Therefore , I would not want to sound a sadist but I highly doubt even with revenues from oil Our lifes will not change.


Our lives will change.

Oil bill is the largest hole for our forex. Seal that hole and hard currencies[moreso usd] become cheaper for import of machinery and raw materials.
Heck throw in automobiles,liqour,"unga" etc etc.

Lives will mos def change.
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Obi 1 Kanobi
#340 Posted : Thursday, September 05, 2013 4:51:29 PM
Rank: Elder

Joined: 7/23/2008
Posts: 3,017
mkeiyd wrote:
josimar wrote:
The most important thing is to have the oil resources utilized well. We already have foreign income earners from Tea , coffee and tourism. What baffles me todate is why the roads in the tea growing areas are very bad , just pay a visit to KTDA factories in Meru area and You will witness this. Masai Mara brings revenue to Narok county yet the roads leading there are horrible. Look at the roads in Mombasa tourist areas. Therefore , I would not want to sound a sadist but I highly doubt even with revenues from oil Our lifes will not change.


Our lives will change.

Oil bill is the largest hole for our forex. Seal that hole and hard currencies[moreso usd] become cheaper for import of machinery and raw materials.
Heck throw in automobiles,liqour,"unga" etc etc.

Lives will mos def change.


The only risk with oil is that the population could transform from the innovators that we currently are to consumers akin Arabs, Angolans etc. We need to get the Norwegian playbook ASAP
"The purpose of bureaucracy is to compensate for incompetence and lack of discipline." James Collins
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