The president live from state house on Eurobond!!

Uhuru needs to realize that the local interest rates will not come down until he deals with the budget deficit and comes up with a credible policy of budgetary restraint. His tax and spend policy will cripple the private sector and increase inflation.

My take. From Elliott Wave and Socionomic perspective:
The success of the Euro Bond occurs at a very interesting juncture. In Kenya we are celebrating, yet celebration of success occur at market tops (which is the case with NSE 20 index). Going forward i expect the dramatic fall I have been predicting to occur (mind you, we may have an interim rally but overall the market is headed lower. by end of 2014 NSe may be printing levels people here cannot fathom at the moment).

I expect bond rates to rise (in line with the chart I posted in a previous post).

Global equities are at an interesting turn. The US contracted by 3% in a previous quarter. Means the forces of deflation are taking over. a dramatic fall in DJIA is in the cards quite soon.

Gold (and commodities in general) should drop too.

Pessimistic? Yes. But the market follows the path of the waves which is human psychology in action.

NB: Don't kill the messenger.

Interesting to see KE treasury talk of diversification on the international bond market. The islamic (sukuk) bond market offers a good ground for stability. Also the asian bond (samurai - yen based) has plenty to offer. Though I don't see any mention about dim sum (asian - yuan based) bonds. Treasury should also go for the dim sum bonds which is now growing and has plenty to offer. A lot of chingland interest is in KE anyway e.g. A dim sum bond for LAPSSET to raise those KES trillions.

This way KE diversifies the FX risks and is a better way to guard against KES weakness than CBK flooding the market all the time with USD - a short term and expensive remedy.

Once gok has floats in eurobond, sukuk, samurai and dim sum markets, local firms can also find it easier to issue bonds on the same. This will take the punch bowl for the local banks and lead to lending rates dipping as the lending market re-adjusts.

If the above is implemented nicely, single digit lending rates will show up in KE. But they should first target the mortgage market and asset finance. Cheap personal loans should be discouraged since they lead to consumerism expansion which burns KES vs USD and rarely provides any economical gains. Until KE has a strong industrial and agri-econ base, consumerism should be discouraged.

**Obviously for KE to succeed the international bond monies should be well utilized by gok. Otherwise the mess will fry the econ badly.**