wukan wrote:lochaz-index wrote:wukan wrote:Would it have mattered if Kibaki was still president. The impulse wave started in in 2002 had to be corrected. You can't rig markets
Partly disagree. It is enough that the global economy is in turmoil to roil the markets. With strong local fundies, Nse20 despite taking a beating would have withstood the storm a lot better than what is unraveling or about to unravel. That KE has by and large self inflicted this nagging wound cannot be highlighted enough.
Me thinks we have a deep structural problem with our economy which Kibaki did not attempt to solve neither has Uhuru nor any other of the other leading lights. That's why we need a deep correction. Structurally the economy has moved on the same rails from 1900. It is still a dual economy-the formal and informal and they often don't move in tandem. Policy makers act clueless until it's too late.
See this example on investments by RufusQuote:Their investment in financial assets is lagging; there are less than 1.5 million self-directed investors at the NSE, assets under management by collective investments schemes account for less than one percent of GDP and pension assets account for about 10 percent of GDP.
We speak of the GFC low of 2360 to mean Kibaki escapes the blame yet fundamentally the lack of trickle down of the 2002-2007 impulse wave and resulting 2008 PEV hit the NSE harder necessitating a stimulus. From 2009-2011 NSE was really running on a sugar high therefore needing a more complex correction. To keep the sugar high we run another stimulus in form of debt financed infrastructural development. The market still continues to correct which you see in the collapse of private sector credit demand.
What structural adjustment of the economy do you think kibaki,uhuru, raila, ruto et.all would have delivered differently? None they all think the same-two sides of the same coin.
KE has structural problems that is not in doubt...it has had them all along even in pre-colonial times and it will take an almighty effort to change course perhaps through the ticking demographic time bomb. That still doesn't excuse the fiscal indiscipline of the current regime, white elephant projects strewn all over the place, debt spree/treadmill and the general emasculation of the private sector. It is laughable to suggest that the current leadership can tackle structural issues if the basics are Greek to them.
2002-2007 was superb economically on a trickle down basis - all the succesful IPOs during that time is testament to this fact from an NSE perspective, deepening of financial inclusion, absorption levels of skilled and semi-skilled labour in to the formal wrokforce etc - but the regime changed tune after 2008 to go the Hollywood way of shiny/grandiose projects and hollow/vanity undertakings like project 2030 and the likes. The big 4 projects are a tragic comedy. 2008 PEV was as a result of political gamesmanship than economics. The current downslide is economic in nature and even an ambient political environment won't change it...the die is already cast as it were.
That said, the faster the reset happens the better.
The main purpose of the stock market is to make fools of as many people as possible.