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Ksh at its weakest since it floated in 1994
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hisah
#801 Posted : Monday, February 18, 2013 8:13:17 AM
Rank: Chief

Joined: 8/4/2010
Posts: 8,977
ChessMaster wrote:
hisah wrote:
CBK tightens liquidity ahead of polls - http://www.businessdaily...6/-/lvk9nl/-/index.html

A desperate CB this one. No need to fight it trying to short the KES. They'll pull all the stops whichever way possible. I still do not advocate playing against the KES, stocks are a better bet.


For me if the shilling weakens foreigner appetite increases.What are your thoughts?

Orderly weakness doesn't spook markets. The opposite does and no investor wants to be caught up in such a storm. E.g. You invest $100,000 @KES80 then 4 weeks later the $ rate spikes to KES90 as the local currency experiences a run. No equity or bond market rallies in such an environment due to currency panic & disorderly fin markets and a panicky CB fighting the fin market. If lucky say that stock didn't selloff, you cash out and convert back to USD. You end up with less USD incurring a forex loss.

In 2011 when the CB managed to smoke out the madness by two huge CBR hikes, fx controls & liquidity controls in Nov, that was when foreign money got interested.
$15/barrel oil... The commodities lehman moment arrives as well as Sovereign debt volcano!
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  | | Edit by user: Monday, February 18, 2013 8:14 AM | Reason: Not specified
hisah
#802 Posted : Monday, February 18, 2013 8:30:51 AM
Rank: Chief

Joined: 8/4/2010
Posts: 8,977
KPLC to be given the greenlight to hike tariffs. ERC to regulate - http://www.businessdaily...l/-/6iww3c/-/index.html

Power hike = inflation rate rise

This is a sad situation and is expected when you take loans from IMF/WB.
Quote:
While higher tariffs will hit consumers hard, it is expected to lift the fortunes of Kenya Power, which says rising operating costs is hurting its margins.

Managing director Joseph Njoroge said that new
tariffs would help the utility firm raise funds for
investment in electricity distribution network.

Higher revenue is also aimed at winning the
confidence of financiers like European Investment Bank and the World Bank on whom the company relies on to fund its large capital expenditure.

$15/barrel oil... The commodities lehman moment arrives as well as Sovereign debt volcano!
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  | | Edit by user: Monday, February 18, 2013 8:32 AM | Reason: Not specified
Impunity
#803 Posted : Monday, February 18, 2013 9:05:16 AM
Rank: Elder

Joined: 3/2/2009
Posts: 26,331
Location: Masada
hisah wrote:
KPLC to be given the greenlight to hike tariffs. ERC to regulate - http://www.businessdaily...l/-/6iww3c/-/index.html

Power hike = inflation rate rise

This is a sad situation and is expected when you take loans from IMF/WB.
Quote:
While higher tariffs will hit consumers hard, it is expected to lift the fortunes of Kenya Power, which says rising operating costs is hurting its margins.

Managing director Joseph Njoroge said that new
tariffs would help the utility firm raise funds for
investment in electricity distribution network.

Higher revenue is also aimed at winning the
confidence of financiers like European Investment Bank and the World Bank on whom the company relies on to fund its large capital expenditure.



If a certain coalition wins you can imagine!!!
Portfolio: Sold
You know you've made it when you get a parking space for your yatcht.
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Kausha
#804 Posted : Monday, February 18, 2013 10:46:19 AM
Rank: Member

Joined: 2/8/2007
Posts: 808
Duft move by all concerned. Who said KPLC must make top end profits? This single move if effected will push up inflation to past 12.5%. Most of the consumer goods and telecoms are powered by KPLC sourced power mainly. And then the vicious cycle will begin again......higher interest rates, no economic growth, pay agitation from all civil servants, redundancies in private sector, security will not necessarily improve and social unrest will slowly creep in. I mean is the GoK demented? You have to control inflation else you can stop talking about any economic growth or development in a free market economy. Even those who control prices in restricted economies do so to manage inflation. ARRRRRGGGHHHHH!!!
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dunkang
#805 Posted : Monday, February 18, 2013 10:13:49 PM
Rank: Elder

Joined: 6/2/2011
Posts: 4,824
Location: -1.2107, 36.8831
CBK depleting foreign currency reserve FAAASSST
Receive with simplicity everything that happens to you.” ― Rashi

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Pesa Nane
#806 Posted : Monday, February 18, 2013 11:37:24 PM
Rank: Elder

Joined: 5/25/2012
Posts: 4,105
Location: 08c
dunkang wrote:
CBK depleting foreign currency reserve FAAASSST

Quote:Figures indicate that these reserves decreased from $5.177 billion (equivalent to 4.06 months of import cover) as at January 24 to $4.959 billion (equivalent to 3.89 months of import cover) in the week ending January 31.

The position has since deteriorated to $4.975 billion (equivalent to 3.79 months of import cover) as at February 7 to $4.960 billion (equivalent to 3.78 months of import cover) in the week ending February 14. Unquote

Gutter Press. $4.975 B and $4.960 B are greater than $4.959
Pesa Nane plans to be shilingi when he grows up.
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hisah
#807 Posted : Tuesday, February 19, 2013 6:39:29 AM
Rank: Chief

Joined: 8/4/2010
Posts: 8,977
Pesa Nane wrote:
dunkang wrote:
CBK depleting foreign currency reserve FAAASSST

Quote:Figures indicate that these reserves decreased from $5.177 billion (equivalent to 4.06 months of import cover) as at January 24 to $4.959 billion (equivalent to 3.89 months of import cover) in the week ending January 31.

The position has since deteriorated to $4.975 billion (equivalent to 3.79 months of import cover) as at February 7 to $4.960 billion (equivalent to 3.78 months of import cover) in the week ending February 14. Unquote

Gutter Press. $4.975 B and $4.960 B are greater than $4.959

Expected of substandard paper.

Fighting a desperate CB is bad biz. KES shorts cant work in an illiquid market full of controls barriade. Interbank rate spike means CB is mopping KES as fast as possible. Fin markets thrive on liquidity. Pushing the $ beyond 90 in this environment is really tough.
$15/barrel oil... The commodities lehman moment arrives as well as Sovereign debt volcano!
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hisah
#808 Posted : Tuesday, February 19, 2013 6:41:30 AM
Rank: Chief

Joined: 8/4/2010
Posts: 8,977
Good article - http://www.businessdaily...8/-/7cx3x9z/-/index.html
$15/barrel oil... The commodities lehman moment arrives as well as Sovereign debt volcano!
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dunkang
#809 Posted : Tuesday, February 19, 2013 9:30:19 AM
Rank: Elder

Joined: 6/2/2011
Posts: 4,824
Location: -1.2107, 36.8831
Shilling at risk as reserve hits 8 months low
Receive with simplicity everything that happens to you.” ― Rashi

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new
#810 Posted : Tuesday, February 19, 2013 11:18:07 AM
Rank: New-farer

Joined: 1/4/2013
Posts: 22
dunkang wrote:
Shilling at risk as reserve hits 8 months low


last time the reserves went below the 3.7 months import cover, and the market got wind of that news, the KeS took a massive hit. The CBK seems very vigilant this time round. i wonder how longer they can support the beloved KeS though
Dum vivimus, vivamus.
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