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Law Capping interest rates
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Swenani
#981 Posted : Saturday, September 10, 2016 3:10:00 AM
Rank: User

Joined: 8/15/2013
Posts: 13,237
Location: Vacuum
obiero wrote:
Plimsoul wrote:
Irony of using KBRR is that because it's lower, banks move to lending to govt. So tbills drop, and because tbills make up KBRR, KBRR drops further. CBK wont even have to change CBR.

Interesting times ahead.


But KBRR is extra low considering free deposits from majority of the transactional accounts.. CBA did no one a favor, including themselves.. But their source of funds may be illegit so we understand


What do you mean their source of funds maybe illegit?
If Obiero did it, Who Am I?
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Ericsson
#982 Posted : Saturday, September 10, 2016 7:17:46 AM
Rank: Elder

Joined: 12/4/2009
Posts: 10,827
Location: NAIROBI
CBA has to support the hand that feeds them/its owner
Wealth is built through a relatively simple equation
Wealth=Income + Investments - Lifestyle
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obiero
#983 Posted : Saturday, September 10, 2016 7:40:18 AM
Rank: Elder

Joined: 6/23/2009
Posts: 14,340
Location: nairobi
maka wrote:
obiero wrote:
Pesa Nane wrote:
obiero wrote:
maka wrote:
Look at this;

This month the Central Bank of Kenya offered a 10 year Treasury Bond for a total amount of up to Kshs 25 Billion. The total number of bids received was 795 amounting to Kshs 26.31 Billion. The Weighted average rate for successful bids was 15.039%

Coupon 15.039% crazy...even after WHT its good cash

I spoke to the president and his take was that the government shall pull down borrowing rates for itself, which is a good thing.. Expect government to obtain cheap credit. Watch the tbill rate slide down in coming months. We live in good times

Congrats for speaking with @citizen001 but you should have asked him how the "government shall pull down borrowing rates for itself" when in fact we know the rates are market driven (through auctions)

Beg to differ. The auctions are driven mainly by banks.. Now that banks are pushed to the wall on consumer lending, expect government to show a stiff hand


Rates at the auction won't come down anytime soon....that 10 year was just a start.

91, 182, 364 day bills all down.. Expect the shorter tenor to hit 6.5% by December.. As per Graham's law, the bulls at the NSE must show up shortly.. http://www.businessdaily...74800-b0eb44z/index.html
COOP, IMH, KEGN, KQ, MTNU
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  | | Edit by user: Saturday, September 10, 2016 7:45 AM | Reason: Not specified
KulaRaha
#984 Posted : Saturday, September 10, 2016 7:57:22 AM
Rank: Elder

Joined: 7/26/2007
Posts: 6,514
At 12.9% kcb and co are doomed.
Business opportunities are like buses,there's always another one coming
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obiero
#985 Posted : Saturday, September 10, 2016 8:02:07 AM
Rank: Elder

Joined: 6/23/2009
Posts: 14,340
Location: nairobi
KulaRaha wrote:
At 12.9% kcb and co are doomed.

What forms the basis of your judgement. Kenyan banks could lend at 5% and still make a profit.. It all depends on cost of funds.. Recalibration of the accounts that qualify for the minimum of 70% on CBR shall determine which bank thrives.. COOP via the SACCO movement remains the best bet to ride this wave
COOP, IMH, KEGN, KQ, MTNU
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  | | Edit by user: Saturday, September 10, 2016 8:05 AM | Reason: Not specified
Ericsson
#986 Posted : Saturday, September 10, 2016 8:21:33 AM
Rank: Elder

Joined: 12/4/2009
Posts: 10,827
Location: NAIROBI
Kenyan currency will be under pressure from the majors.
CBK will raise interest rates to try cushion it and we'll be back to square one.
This is an election gimmick and not a true economic policy.
The incumbent is trying to use all means to secure second term
Wealth is built through a relatively simple equation
Wealth=Income + Investments - Lifestyle
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KulaRaha
#987 Posted : Saturday, September 10, 2016 8:48:05 AM
Rank: Elder

Joined: 7/26/2007
Posts: 6,514
obiero wrote:
KulaRaha wrote:
At 12.9% kcb and co are doomed.

What forms the basis of your judgement. Kenyan banks could lend at 5% and still make a profit.. It all depends on cost of funds.. Recalibration of the accounts that qualify for the minimum of 70% on CBR shall determine which bank thrives.. COOP via the SACCO movement remains the best bet to ride this wave


With a gross spread of 6% and npls higher, how will they earn a profit?
Business opportunities are like buses,there's always another one coming
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tom_boy
#988 Posted : Saturday, September 10, 2016 8:53:45 AM
Rank: Member

Joined: 2/20/2007
Posts: 767
obiero wrote:
maka wrote:
obiero wrote:
Pesa Nane wrote:
obiero wrote:
maka wrote:
Look at this;

This month the Central Bank of Kenya offered a 10 year Treasury Bond for a total amount of up to Kshs 25 Billion. The total number of bids received was 795 amounting to Kshs 26.31 Billion. The Weighted average rate for successful bids was 15.039%

Coupon 15.039% crazy...even after WHT its good cash

I spoke to the president and his take was that the government shall pull down borrowing rates for itself, which is a good thing.. Expect government to obtain cheap credit. Watch the tbill rate slide down in coming months. We live in good times

Congrats for speaking with @citizen001 but you should have asked him how the "government shall pull down borrowing rates for itself" when in fact we know the rates are market driven (through auctions)

Beg to differ. The auctions are driven mainly by banks.. Now that banks are pushed to the wall on consumer lending, expect government to show a stiff hand


Rates at the auction won't come down anytime soon....that 10 year was just a start.

91, 182, 364 day bills all down.. Expect the shorter tenor to hit 6.5% by December.. As per Graham's law, the bulls at the NSE must show up shortly.. http://www.businessdaily...74800-b0eb44z/index.html


As per my predictions, the dance between banks and Government in pricing billsand bonds has begun. Banks cannot afford to flood CBK with offers! They will have to worksmart.
They must find it difficult....... those who have taken authority as the truth, rather than truth as the authority. -G. Massey.
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FRM2011
#989 Posted : Saturday, September 10, 2016 8:59:14 AM
Rank: Elder

Joined: 11/5/2010
Posts: 2,459
Ericsson wrote:
CBA has to support the hand that feeds them/its owner


CBA is going for the kill. They have realised equity and co. are stranded and can't make a move.

Two things about CBA.

1. They bank for safcom who are struggling with a problem akin to Apple. Too much cash.

2. You know that balance in your mpesa account. It's electronic value and someone needs to hold the hard cash equivalent. CBA is that guy. They are the settlement bank for mpesa. And Kenyans move 200bn a month.
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Intelligentsia
#990 Posted : Saturday, September 10, 2016 10:14:41 AM
Rank: Elder

Joined: 10/1/2009
Posts: 2,436
Ericsson wrote:
CBA has to support the hand that feeds them/its owner


No methinks the issue of ownership doesnt comes in here for reckoning at all. Most likley aligning themselves to the possibility of Omtata's suit going thru in which case they will be already compliant.

CBA should be having better margins by virtue of low cost of funds

my 2 cents.
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  | | Edit by user: Saturday, September 10, 2016 10:15 AM | Reason: Not specified
303 Pages«<979899100101>»
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