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Interest rates US vs. Kenya
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guru267
#11 Posted : Friday, January 22, 2010 10:44:39 AM
Rank: Elder

Joined: 1/21/2010
Posts: 6,675
Location: Nairobi
From an economic point of view our rates are perfect around 7.5%. if they were below 1% u weud see inflation hit 30%.. CBK knws wat its doin
Mark 12:29
Deuteronomy 4:16
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kizee
#12 Posted : Friday, January 22, 2010 10:48:53 AM
Rank: Member

Joined: 1/9/2008
Posts: 537
scubi

maybe the bonds he mentioned are structured products..bond is really sovereign but return is based on fcy yields..US UK EU..by structual flaws i mean illiquidity- u cant short GoK bonds,market is illiquid,its hard to get a 2 way price, its hard to get an objective valuation of ur holdings(yield curve)...
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kizee
#13 Posted : Friday, January 22, 2010 10:50:29 AM
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Joined: 1/9/2008
Posts: 537
the fx platform is a whole different subset...if u wish to discuss it labda we cud start of a new thread?
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Scubidu
#14 Posted : Friday, January 22, 2010 12:09:25 PM
Rank: Veteran

Joined: 9/4/2009
Posts: 700
Location: Nairobi
Kizee

What makes Nigeria more liquid than us? Oil revenues I bet? Which sector in Kenya has the potential to flush our economy with liquidity?

As for the fx platform, maybe we cud go to that original post you did and you cud tell me what the platform cud do for foreign investment. I haven't a clue but it sounded like it wud improve liquidity.
“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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VituVingiSana
#15 Posted : Friday, January 22, 2010 1:08:47 PM
Rank: Chief

Joined: 1/3/2007
Posts: 18,366
Location: Nairobi
Sovereign Bond is very different (& supposedly safer) than corporate bonds... A Nigerian SOVEREIGN US$ bond offering 18% is very attractive. I would like to know more...
Greedy when others are fearful. Very fearful when others are greedy - to paraphrase Warren Buffett
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kizee
#16 Posted : Friday, January 22, 2010 1:21:47 PM
Rank: Member

Joined: 1/9/2008
Posts: 537
scubz

nigeria FI is more liquid becoz
1. u can short sell theyr bonds
2. the market is transparent
3. kenyan FI market processes until recently were draconic and hence curbed turnover
as a result a wide variety of offshores hav chekd into theyr market..its nothing to do with oil...fyi the KES is africas second most liquid currency...bnot bad eh?
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kizee
#17 Posted : Friday, January 22, 2010 1:24:51 PM
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Joined: 1/9/2008
Posts: 537
vvs

i dont thnk the bond is USD denominated...its an NGN bond but the holder has the option of receivin coupons in USD to avoid ccy risk...its a structured product as it were...i dont think nigeria has dun a Eurobond yet so this is the only explanation i cud think off
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Scubidu
#18 Posted : Friday, January 22, 2010 1:47:18 PM
Rank: Veteran

Joined: 9/4/2009
Posts: 700
Location: Nairobi
kizee. I didn't know KES was Africa's second most liquid currency, that's amazing. I figured cos of Nigeria's huge banks & oil, they'd be up there. And ur probably right on the Nigerian bond issue as well, it was probably a structured product.

But as developed as their market is they ran into real problems with margin loans. What you think of those at the NSE? btw I heard that there were some bond traders at the NSE who tried short selling bonds (not many) but CMA wudn't have any of it.
“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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gathinga
#19 Posted : Saturday, January 23, 2010 5:27:31 AM
Rank: Veteran

Joined: 11/30/2006
Posts: 635
Where is RicDeees, would love to get and opinion from UK on this.

@cicero. The nigerian polotical system and situation is far more fragile and fluid than ours. That may not be the reason.

@kizee. Interesting that Kshs. is the second most liquid currency; do you have any material/link on this. It would make and interesting read
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  | | Edit by user: Saturday, January 23, 2010 5:55 AM | Reason: Not specified
kizee
#20 Posted : Saturday, January 23, 2010 8:38:00 AM
Rank: Member

Joined: 1/9/2008
Posts: 537
@scubidu re short sellin..yes ur right cma blocked it but GoK bonds need not be traded at an exchange and soon short sellin will be a reality re margin tradin...one of the golden rules is NEVER BET THE FARM...i dont beleive in leverage its very hard to stay in the game long

@gathinga
re kes i really hav no link...i just kno.. ask any EM market trader and he will tell u the same..main reason is many african ctrys have exchange controls which kenya doesnt...kenyas financial market scene is set to explode i tell u
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