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Elliott Wave Analysis Of The NSE 20
Rank: Chief Joined: 1/3/2007 Posts: 18,351 Location: Nairobi
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@lochaz-index - It's a pity that GoK will have to sell their stakes at a throw-away price BUT it needs to get out of the business of Business. It should try to get rid of the bad apples like Mumias and Uchumi. Vodafone (or large funds) may be in the market for Safaricom. KenRe could find a strategic investor as long as GoK allows it to buy 51% Greedy when others are fearful. Very fearful when others are greedy - to paraphrase Warren Buffett
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Rank: Veteran Joined: 11/13/2015 Posts: 1,654
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Liv wrote:lochaz-index wrote:Just had a quick look at the finance bill (now law), the implications of the taxes will be devastating:
1. Money velocity is about to go to the dogs. Deflation in earnest really and it won't be kind to any asset class including the NSE.
2. Looks like KE won't be dodging a debt/fiscal crisis.
3. KES devaluation is now almost a certainty, the only question is when.
4. Political and civil upheaval is expected coz the only language treasury understands is increasing taxes. The other half of the 8% VAT will be imposed at the very latest in the 2019/20 budget.
5. Capital gains tax especially on real estate will be increased substantially.
I agree with your conclusion point 1 above based on the new law.
A). How do you come to the other 4 points in your conclusion based on the new law?
B) How does KES devaluation become a certainty in an environment of deflation?
C) conclusion point 4 is just wishful thinking in my view.... It will not happen in Kenya as we are so divided by tribe and we follow our tribal leaders.
A. Based on the level of desperation shown by Treasury to pass the new law...you get that nakumatt feeling. The market is pretty good at smelling desperation. The sharks will start gathering same way they did in Turkey and Argentina. We told IMF to f*** off with their insurance cover. B. @lochaz-index has previously posted that the interest rate cap operates like a currency peg. It's deflationary at at time when KE has piled up debt. It's also helping our current account by slowing down consumption of imports. It's almost like we are artificially propping KES. When the peg can't be defended because of reduced forex reserves then  for KES. You might see KES beyond 120. C. In 2002 it was "yote yawezekana" so let's just watch the unfolding events.
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Rank: Elder Joined: 10/11/2006 Posts: 2,304
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//Article How to Win Against the Dangerous “Herding Impulse”We all love a bargain… …Except when it comes to stocks. The reason boils down to uncertainty. We know what our fruits and vegetables should cost at the grocer’s — but we’re far less certain about how much to pay for a blue-chip stock or shares in an S&P 500 Index fund. So how does our mind work in decisions that involve certainty vs. uncertainty? Robert Prechter and Wayne Parker, co-authors of the paper, ”The Financial/Economic Dichotomy in Social Behavioral Dynamics: The Socionomic Perspective” (Journal of Behavioral Finance, Vol. 8, No. 2, pp. 84-108, 2007) explain that in each situation, very different regions of the brain take over — literally. Quote:When we spend money as consumers, we depend on the neocortex region of the brain, where our ability to reason resides. For example, if we shop for groceries and see our favorite fruit on sale at a 40 percent discount, we think “That’s a good deal. I make the best use of my money by buying it now.” And, if we hang around to watch how other shoppers behave, we see that particular item sell out sooner than usual. In other words: The demand for consumer goods rises as the price falls. But when we spend money as investors, our brain relies on the more primitive region — the basal ganglia — which drives unconscious behavior such as herding. Let’s say that 30 minutes after the stock market opens, we see that the blue-chip stock we own is down 20 percent. We know that shareholders are fleeing the stock. The basal ganglia screams, “They know something I don’t. I’d better sell too.” In this case, demand for the asset FALLS as the price falls. Why? Because in speculative markets, assets have no true utility. An investor buys it today in the hope that it will be worth more to another investor tomorrow. But that future value is uncertain, so the brain defaults to herding. The sketch of the brain shows the locations of the conscious, reasoning neocortex and the unconscious, impulsive lower areas:  In other words, herding impulses force you to “buy high — and sell low,” precisely the opposite of what you should be doing. Can you win? Yes. Instead of getting wrapped up in the day’s news, when you study the collective psychology of market participants, you see the markets objectively — and separate yourself from the herd. Want to learn more? Download “The Financial/Economic Dichotomy in Social Behavioral Dynamics: The Socionomic Perspective.” Conventional thinkers waste time building shelters when they are unnecessary and then have no shelters when they need them the most. Socionomists do the opposite.
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Rank: Elder Joined: 6/23/2009 Posts: 14,227 Location: nairobi
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mnandii wrote://Article How to Win Against the Dangerous “Herding Impulse”We all love a bargain… …Except when it comes to stocks. The reason boils down to uncertainty. We know what our fruits and vegetables should cost at the grocer’s — but we’re far less certain about how much to pay for a blue-chip stock or shares in an S&P 500 Index fund. So how does our mind work in decisions that involve certainty vs. uncertainty? Robert Prechter and Wayne Parker, co-authors of the paper, ”The Financial/Economic Dichotomy in Social Behavioral Dynamics: The Socionomic Perspective” (Journal of Behavioral Finance, Vol. 8, No. 2, pp. 84-108, 2007) explain that in each situation, very different regions of the brain take over — literally. Quote:When we spend money as consumers, we depend on the neocortex region of the brain, where our ability to reason resides. For example, if we shop for groceries and see our favorite fruit on sale at a 40 percent discount, we think “That’s a good deal. I make the best use of my money by buying it now.” And, if we hang around to watch how other shoppers behave, we see that particular item sell out sooner than usual. In other words: The demand for consumer goods rises as the price falls. But when we spend money as investors, our brain relies on the more primitive region — the basal ganglia — which drives unconscious behavior such as herding. Let’s say that 30 minutes after the stock market opens, we see that the blue-chip stock we own is down 20 percent. We know that shareholders are fleeing the stock. The basal ganglia screams, “They know something I don’t. I’d better sell too.” In this case, demand for the asset FALLS as the price falls. Why? Because in speculative markets, assets have no true utility. An investor buys it today in the hope that it will be worth more to another investor tomorrow. But that future value is uncertain, so the brain defaults to herding. The sketch of the brain shows the locations of the conscious, reasoning neocortex and the unconscious, impulsive lower areas: In other words, herding impulses force you to “buy high — and sell low,” precisely the opposite of what you should be doing. Can you win? Yes. Instead of getting wrapped up in the day’s news, when you study the collective psychology of market participants, you see the markets objectively — and separate yourself from the herd. Want to learn more? Download “The Financial/Economic Dichotomy in Social Behavioral Dynamics: The Socionomic Perspective.” Stay away from the herd. Good read. Thanks for the share
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Rank: Veteran Joined: 9/18/2014 Posts: 1,127
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VituVingiSana wrote:@lochaz-index - It's a pity that GoK will have to sell their stakes at a throw-away price BUT it needs to get out of the business of Business.
It should try to get rid of the bad apples like Mumias and Uchumi.
Vodafone (or large funds) may be in the market for Safaricom.
KenRe could find a strategic investor as long as GoK allows it to buy 51% It is a damn shame for sure but when 'experts' bahave as if they can repeal the laws of economics or like they have never heard of them, unintended consequences tend to follow swiftly. The main purpose of the stock market is to make fools of as many people as possible.
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Rank: Veteran Joined: 9/18/2014 Posts: 1,127
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wukan wrote:Liv wrote:lochaz-index wrote:Just had a quick look at the finance bill (now law), the implications of the taxes will be devastating:
1. Money velocity is about to go to the dogs. Deflation in earnest really and it won't be kind to any asset class including the NSE.
2. Looks like KE won't be dodging a debt/fiscal crisis.
3. KES devaluation is now almost a certainty, the only question is when.
4. Political and civil upheaval is expected coz the only language treasury understands is increasing taxes. The other half of the 8% VAT will be imposed at the very latest in the 2019/20 budget.
5. Capital gains tax especially on real estate will be increased substantially.
I agree with your conclusion point 1 above based on the new law.
A). How do you come to the other 4 points in your conclusion based on the new law?
B) How does KES devaluation become a certainty in an environment of deflation?
C) conclusion point 4 is just wishful thinking in my view.... It will not happen in Kenya as we are so divided by tribe and we follow our tribal leaders.
A. Based on the level of desperation shown by Treasury to pass the new law...you get that nakumatt feeling. The market is pretty good at smelling desperation. The sharks will start gathering same way they did in Turkey and Argentina. We told IMF to f*** off with their insurance cover. B. @lochaz-index has previously posted that the interest rate cap operates like a currency peg. It's deflationary at at time when KE has piled up debt. It's also helping our current account by slowing down consumption of imports. It's almost like we are artificially propping KES. When the peg can't be defended because of reduced forex reserves then for KES. You might see KES beyond 120. C. In 2002 it was "yote yawezekana" so let's just watch the unfolding events. KE looks like an Argentina but without the bad rep of credit defaults. The main purpose of the stock market is to make fools of as many people as possible.
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Rank: Veteran Joined: 4/4/2016 Posts: 2,016 Location: Kitale
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VituVingiSana wrote:@lochaz-index - It's a pity that GoK will have to sell their stakes at a throw-away price BUT it needs to get out of the business of Business.
It should try to get rid of the bad apples like Mumias and Uchumi.
Vodafone (or large funds) may be in the market for Safaricom.
KenRe could find a strategic investor as long as GoK allows it to buy 51% it will be good for Gok to get out of business.There is no need to tax your own business while at the same time you expect to reap dividends.Safaricom will be taxed data and mpesa while Gok owns 25% of its shareholding. Towards the goal of financial freedom
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Rank: Elder Joined: 6/23/2009 Posts: 14,227 Location: nairobi
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Ebenyo wrote:VituVingiSana wrote:@lochaz-index - It's a pity that GoK will have to sell their stakes at a throw-away price BUT it needs to get out of the business of Business.
It should try to get rid of the bad apples like Mumias and Uchumi.
Vodafone (or large funds) may be in the market for Safaricom.
KenRe could find a strategic investor as long as GoK allows it to buy 51% it will be good for Gok to get out of business.There is no need to tax your own business while at the same time you expect to reap dividends.Safaricom will be taxed data and mpesa while Gok owns 25% of its shareholding. I don't see any issue here.. Double gains in terms of dividend cheque plus tax revenue. Telcos should actually be properly taxed in Kenya. Those gains are immoral. Its all fair from GoK point of view
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Rank: Elder Joined: 12/4/2009 Posts: 10,809 Location: NAIROBI
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obiero wrote:Ebenyo wrote:VituVingiSana wrote:@lochaz-index - It's a pity that GoK will have to sell their stakes at a throw-away price BUT it needs to get out of the business of Business.
It should try to get rid of the bad apples like Mumias and Uchumi.
Vodafone (or large funds) may be in the market for Safaricom.
KenRe could find a strategic investor as long as GoK allows it to buy 51% it will be good for Gok to get out of business.There is no need to tax your own business while at the same time you expect to reap dividends.Safaricom will be taxed data and mpesa while Gok owns 25% of its shareholding. I don't see any issue here.. Double gains in terms of dividend cheque plus tax revenue. Telcos should actually be properly taxed in Kenya. Those gains are immoral. Its all fair from GoK point of view Airtel and Telkom kenya will be finished Wealth is built through a relatively simple equation
Wealth=Income + Investments - Lifestyle
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Rank: Veteran Joined: 11/14/2006 Posts: 1,311
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wukan wrote:Liv wrote:lochaz-index wrote:Just had a quick look at the finance bill (now law), the implications of the taxes will be devastating:
1. Money velocity is about to go to the dogs. Deflation in earnest really and it won't be kind to any asset class including the NSE.
2. Looks like KE won't be dodging a debt/fiscal crisis.
3. KES devaluation is now almost a certainty, the only question is when.
4. Political and civil upheaval is expected coz the only language treasury understands is increasing taxes. The other half of the 8% VAT will be imposed at the very latest in the 2019/20 budget.
5. Capital gains tax especially on real estate will be increased substantially.
I agree with your conclusion point 1 above based on the new law.
A). How do you come to the other 4 points in your conclusion based on the new law?
B) How does KES devaluation become a certainty in an environment of deflation?
C) conclusion point 4 is just wishful thinking in my view.... It will not happen in Kenya as we are so divided by tribe and we follow our tribal leaders.
A. Based on the level of desperation shown by Treasury to pass the new law...you get that nakumatt feeling. The market is pretty good at smelling desperation. The sharks will start gathering same way they did in Turkey and Argentina. We told IMF to f*** off with their insurance cover. B. @lochaz-index has previously posted that the interest rate cap operates like a currency peg. It's deflationary at at time when KE has piled up debt. It's also helping our current account by slowing down consumption of imports. It's almost like we are artificially propping KES. When the peg can't be defended because of reduced forex reserves then for KES. You might see KES beyond 120. C. In 2002 it was "yote yawezekana" so let's just watch the unfolding events.
A). Desperation? What desperation.... the government lowered vat on petrol products from 16 to 8%. They cut the budget by sh 55 billion. Where did you read desperation?... Can you explain what the sharks you are talking about will do to the economy or are likely to do?
B). The KES is not strong today because it's being defended using Forex reserves. It's strong because of the deflationary state of the economy. I asked....how will KES weaken in the current state of deflation? And at what point will the Peg you mentioned become indefensible?
C). I didn't get your point how the new law will eventually lead to political chaos in Kenya. Please elaborate.
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Elliott Wave Analysis Of The NSE 20
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