guru267 wrote:VituVingiSana wrote:kyt wrote:guru267 wrote:VituVingiSana wrote:guru267 wrote:VituVingiSana wrote:youcan'tstopusnow wrote:VituVingiSana wrote:mlennyma wrote:The 1st listed bank to pull the trigger has not disappointed.kenya is a great economy despite the politics,inflation and drought.
Or they are exploiting us... Funny, that when OMCs make a low ROA but prices of fuel go up... all are up in arms yet Kenya's largest OMC makes far less in 1 year than Barclays or Equity does in 1 quarter....
VVS, mafuta ni muhimu! I humbly suggest that people should stack their portfolios with banks. THIS IS THE DECADE OF THE BANKS!
I support free markets but
if we are going for price controls then start with banks! Let the lending & savings rates be 'fixed' through a fair formula so banks will have to be more efficient on how they deliver services.
Banking is not an essential service therefore no grounds for price controls
I disagree. Banking predates petrol by many centuries! We would have more chaos if banking stopped vs no petrol [since we will find alternates to petroleum]
I disagree.. Especially in africa.. Millions of people live without bank accounts and banking does not affect food prices...
So high lending rates impacts a very small segment of the economy whereas fuel is a different story
guru, i actually dont support your argument. Banks are essential in everyday life. Even the unbanked use money dispensed thru banks. Those oil firms get loans from banks. All that interest is passed to the end user!
Hold on! Banking has been around even among the unbanked! When I was a kid, my 'cash' was held in trust by my Grandfather. He was my bank even though I was 'unbanked' according to 'official' records!
As for PETROLEUM fuel. Kwani? How many used it in Kenya 100 years ago? Yet, I am sure the forefathers used granaries to store foddstuffs after a harvest. Or even 'lent' some to neighbours which is banking of a non-monetary type. If the jirani died, then it was written off like bad debts!
@vvs please look at it from a third world point of view...
The major reason most the african banks were unscathed from the financial crisis was good policy but also the irrelevance in many african economies... The whole thing came and past without a whisper in africa..
But have you seen the impact of rising fuel prices.. Protests everywhere...
Is their any country that devotes a large weighting to lending rates when calculating CPI...
How much consideration to companies give to borrowing rates as opposed to fuel costs???
LOL... Let's start with the flawed misconceptions!
1) Not all African banks escaped unscathed. You are using a broad brush & some were lucky not always coz of 'good' policies but the (lucky) 'simple' models in use. BTW, the Nigerian banks which were HUGE compared to Kenyan banks were affected. Severely affected. Some went under & are being bailed out by Govt of Nigeria through AMCON.
2) Banks are very relevant in African economies. I can't think of any major African economy where banks are not relevant. Please illustrate with examples of a major (free) economy without banks. In the '3rd world' or 'African' perspective, banking is more than 'Banks' but includes your village moneylender, MFI, even Safaricom charges a fee for Kopa Credit!
3) CPI calculations probably do not include interest since it cannot be measured accurately in a basket of goods. Nevertheless, interest forms a part of the basket through OTHER goods. Your mama mboga who borrows from Equity to buy veggies weekly. Your matatu owner who borrows to buy the van. Your tea/coffee farmer who borrows (or on credit) to buy fertilizer. Your hairstylist who borrows to buy chairs, etc.
4) You are kidding me! "How much consideration to companies give to borrowing rates as opposed to fuel costs???" [I think QW has stolen you ID]
- Firms that 'borrow' are very sensitive to interest rates. If your firm's CFO does not 'consider' the interest rates then I would sell out asap! Let's take KQ, they negotiate interest rates then try to fix them. Why? It is an IMPORTANT & HUGE part of their costs. They also try to 'fix' fuel costs by hedging.
- Compare apples to apples! Many firms would be 20% of the size without borrowing since they finance buildings, equipment, inventory. Fuel costs are almost the same for all businesses in that sector. Interest costs are not so for a leveraged firm a CFO/CEO who does not pay as much consideration to interest costs should be sacked!
As for why protests over fuel & not interest rates? This is merely a matter of perception. What you see vs what you don't see. Consumers are often idiots or are not shown the whole picture.
In Kenya, it is ILLEGAL for retailers to display goods ex-VAT. Why? GoK does NOT want you to know you pay 100 + 16% VAT but want you to pay 116/-. They don't want you grumbling about 16% VAT.
Greedy when others are fearful. Very fearful when others are greedy - to paraphrase Warren Buffett