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Market Excitement
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vestor
#1 Posted : Monday, February 28, 2011 1:59:17 PM
Rank: Member

Joined: 11/9/2010
Posts: 132
I wonder what will excite the market. With good results coming in, there isn't a commensurate rally.Is it that investors are spoilt for choice? Wazuans,whats your opinion on this?
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hisah
#2 Posted : Monday, February 28, 2011 4:27:51 PM
Rank: Chief

Joined: 8/4/2010
Posts: 8,977
I gave this two explanations why the market will not react or sell some...

http://www.wazua.co.ke/f...amp;m=149655#post149655

http://www.wazua.co.ke/f...&m=152171#post152171
$15/barrel oil... The commodities lehman moment arrives as well as Sovereign debt volcano!
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mkonomtupu
#3 Posted : Monday, February 28, 2011 5:09:27 PM
Rank: Veteran

Joined: 2/10/2010
Posts: 1,001
Location: River Road
@hisah, i really liked the two explanations. What's your advise banks are now trading at p.e. of 8 which is quite attractive some of the yields equal what i am getting on the money market. it's starting to feel like 2001-2002 all over again cheap stocks, a hostile political climate, slowing down of reforms, liquidating of assets in preparation of the elections. Industrials do not seem to be doing so well even absorbing and deploying capital.
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hisah
#4 Posted : Monday, February 28, 2011 6:09:15 PM
Rank: Chief

Joined: 8/4/2010
Posts: 8,977
@mkonomtupu - at the moment I'm more concerned with the behaviour of global oil and global food prices. If this two don't slow down soon, I expect financial markets especially equities to catch a cold. Whether stocks are cheap or expensive, wild oil prices always have a way of raising the red flag on global economy growth, which means bets off on financial markets. I am watching these 2 central banks (US Fed and ECB) to determine which way to go. If ECB hikes rates (very likely) it will feel like March 2008 - end of stimulus or easy money/credit.

Locally watch the inflation rate. If it shoots through 6% and oil prices are still high with a weak shilling, NSE will under perform since the GDP growth will also slow down. If the USD/KES rate hits 90 - I'll be out of stocks completely and troop to the money markets for higher interest rates.
$15/barrel oil... The commodities lehman moment arrives as well as Sovereign debt volcano!
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For Sport
#5 Posted : Monday, February 28, 2011 6:41:19 PM
Rank: Veteran

Joined: 12/23/2010
Posts: 1,229
@ hisah - I'm taking notes.
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Fyatu
#6 Posted : Monday, February 28, 2011 9:04:47 PM
Rank: Veteran

Joined: 1/20/2011
Posts: 1,820
Location: Nakuru
me too
Dumb money becomes dumb only when it listens to smart money
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Fyatu
#7 Posted : Monday, February 28, 2011 9:54:43 PM
Rank: Veteran

Joined: 1/20/2011
Posts: 1,820
Location: Nakuru
The business dude at KTN prime is saying inflation as of today 28 feb 2011 is 6.45%....a quick pick at the money market..the dollar (US) is at 82..
Dumb money becomes dumb only when it listens to smart money
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hisah
#8 Posted : Tuesday, March 01, 2011 7:28:31 AM
Rank: Chief

Joined: 8/4/2010
Posts: 8,977
http://www.businessdaily...6/-/2d0kp3/-/index.html

Inflation rate officially above 6%. Far higher than I had expected and quite a spike above the CBR. MPC has eggs in the face for stating inflation will be contained below 5% limit yet they keep on lowering the CBR. But I'm happy the fraud in the inflation model is getting exposed. But do we expect from gubberment. Last time when maize flour spike above 100, we had 2 prices - one for poor & one for rich fellows. Well, we all know how the story ended. Now we have fuel control. We will see how it ends if history is an indicator.
I'm revising my outrageous 7% target to 9% in the next quarter. This is bad for equities.

@scubidu - where at thou we discuss this inflation hedonics fraud models practised by gubberment. Did u see china did the same this jan and even admitted furging the CPI to manipulate inflation figures. I expect the shanghai & hangseng to lead the rest of global stocks lower as inflation esp real estate blows out of utopia just like europe & US in 2007.
$15/barrel oil... The commodities lehman moment arrives as well as Sovereign debt volcano!
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vestor
#9 Posted : Tuesday, March 01, 2011 9:29:02 AM
Rank: Member

Joined: 11/9/2010
Posts: 132

Thank you all for your contributions.I now see how macro economics come into play in the stock market, with all the info. I will trade defensively, waiting for some opportunities which may present themselves in the near future. I read somewhere that inflation is the interest which is charged to the public.
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mkonomtupu
#10 Posted : Thursday, March 31, 2011 11:50:04 AM
Rank: Veteran

Joined: 2/10/2010
Posts: 1,001
Location: River Road
@Hisah now update us on this 9% inflation which you indicated would come in Q2 and its effect on equities. Is it just temporary or is this the shocker like 1993-1994. I'm thinking if it keeps up at this pace banks are going to get plenty of defaults soon. I'm a simpleton from mashinani so try also explain
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