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Elliott Wave Analysis Of The NSE 20
Rank: Veteran Joined: 9/18/2014 Posts: 1,127
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Liv wrote:Why is NSE index below 3000 and getting worse? Why is KES deteriorating?
My view; it can be challenged
All these are due to the uncertainty of the 2017 elections. Many of the foreigners and kenyans (read Asians) who are major investors in this country are taking cover. They have not only stopped investing but they are taking funds out of kenya until the elections take place and the country settles down politically.
If we manage to transit through this uncertainty safely in August and there are no chaos equivalent to or worse than 2007/2008, most of these funds will be returned here and I am sure the Index will hit 3500 or above by Dec 2017.
All the other factors like inflation, drought, debt levels, etc are just not as significant.
During the pre- election period the NSE provides great prices for great returns in 2018.
What has been ailing the market from early 2015 till end of 2016 where it has shed about 2500 points or approximately 45% from a peak @5500 level? Do you still aver that politics has been the underlying issue all along...three years on the trot? The main purpose of the stock market is to make fools of as many people as possible.
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Rank: Elder Joined: 10/11/2006 Posts: 2,304
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From March 23 rd 2014mnandii wrote:ELLIOTT WAVE ANALYSIS OF THE NSE 20 SHARE INDEXThis is my interpretation of the path of the NSE 20 Share index from the low of Sept. 2002. I've obtained the chart from the FINANCIAL TIMES Website linkElliott wave analysis is mine. Looking at the chart, one can convincingly conclude that it is possible to chart the path of the NSE using Elliott Waves. For those interested in learning the waves you can read ELLIOTT WAVE PRINCIPLE: KEY TO MARKET BEHAVIOUR BY Frost and Prechter. You can get the entire book free and alot more from www.elliottwave.com. It is instructive to note that Prechter and Frost, in the book, predicted the great bull market from 1979 (i.e the DJIA). To date the American market has far exceeded even their own expectations. Prechter won the U.S Trading Championship in 1984 with a record 444% gain. PrechterPrechter is currently researching on social causality via the Socionomics Institute. Now to our analysis:  This chart shows a 5 wave move from the low of Sept. 2002 (1009 points) to the high of Jan 2007 (6026 points). Note the zigzag in wave IV and the triangle in wave four of wave V. This five wave move is called an Impulse Wave. I don't have data from before 1998 so I guess this is a fifth wave move of a much larger impulse wave. A fourth wave usually divides an impulse into a Golden Section. From the low of Sept. 2002 to the high of wave III (at 3176) is a gain of 2167 (i.e. 3176-1009). Wave V has a gain of 3558 points (i.e 6026-2468). Now, wave I through wave III, (i.e 3176-1009=2167) multiplied by 1.618 ( a Fibonacci ratio) gives 3506 points vide: (3176-1009) X 1.618 = 3506 points. Wave V had a gain of 3558 points i.e 6026-2468. The difference btw the two figures (3558 vs 3506) is 52 points which is one and half percentage points from the exact figure! WHY I CONSIDER A HUGE BEAR MARKET FOR NSE1. From the high of 6026, the NSE 20 Share index has fallen in five waves (i.e waves 1, 2, 3, 4 and 5). From the low of March 2009 (at 2576 points), the NSE has moved in 3 waves. Or, at the very least, the move from the part I've labelled A to the part labelled B cannot be considered an impulse wave due to overlap. The Elliott wave pattern that has such characteristics is called a ZIGZAG. A Zigzag is a three wave move that subdivides 5-3-5. So presently we have 5 waves down from the 6026 high, thus forming wave A. Wave B is the three wave move from the low of March 2009 at 2576 to present levels. What remains is another five wave down which is likely to take the 2576 low!!! 2. Also note the DIVERGENCE between the RSI and the highs that the NSE is making presently. 3. From the low of Sept. 2002 to the high of Jan 2007 NSE had a gain of 5017 (i.e 6026-1009) points over a 5 year period. From the low of March 2009 to presently, the NSE has only gained about 2497 points (i.e 5073-2576) over a 5 year period. This is about half the gain of 2002-2007. So we now have a market which shows weakness in breadth apart from not making a new high beyond 6026 points. 4. Economically Kenya has one of the highest taxation levels with little efficiency. Electricity prices are high etc etc. Our debt obligation, though not necessarily un-manageable at this point, has accelerated over the past few years. Alot of grand projects are being announced which appear to be good news. In Elliott analysis complacency usually reigns at the very top of a move. CONCLUSION NSE 20 Share index is over-extended and it is time for a big correction in the market. Regards to all. Conventional thinkers waste time building shelters when they are unnecessary and then have no shelters when they need them the most. Socionomists do the opposite.
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Rank: Elder Joined: 10/11/2006 Posts: 2,304
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mnandii wrote:From March 23 rd 2014mnandii wrote:ELLIOTT WAVE ANALYSIS OF THE NSE 20 SHARE INDEXThis is my interpretation of the path of the NSE 20 Share index from the low of Sept. 2002. I've obtained the chart from the FINANCIAL TIMES Website linkElliott wave analysis is mine. Looking at the chart, one can convincingly conclude that it is possible to chart the path of the NSE using Elliott Waves. For those interested in learning the waves you can read ELLIOTT WAVE PRINCIPLE: KEY TO MARKET BEHAVIOUR BY Frost and Prechter. You can get the entire book free and alot more from www.elliottwave.com. It is instructive to note that Prechter and Frost, in the book, predicted the great bull market from 1979 (i.e the DJIA). To date the American market has far exceeded even their own expectations. Prechter won the U.S Trading Championship in 1984 with a record 444% gain. PrechterPrechter is currently researching on social causality via the Socionomics Institute. Now to our analysis: This chart shows a 5 wave move from the low of Sept. 2002 (1009 points) to the high of Jan 2007 (6026 points). Note the zigzag in wave IV and the triangle in wave four of wave V. This five wave move is called an Impulse Wave. I don't have data from before 1998 so I guess this is a fifth wave move of a much larger impulse wave. A fourth wave usually divides an impulse into a Golden Section. From the low of Sept. 2002 to the high of wave III (at 3176) is a gain of 2167 (i.e. 3176-1009). Wave V has a gain of 3558 points (i.e 6026-2468). Now, wave I through wave III, (i.e 3176-1009=2167) multiplied by 1.618 ( a Fibonacci ratio) gives 3506 points vide: (3176-1009) X 1.618 = 3506 points. Wave V had a gain of 3558 points i.e 6026-2468. The difference btw the two figures (3558 vs 3506) is 52 points which is one and half percentage points from the exact figure! WHY I CONSIDER A HUGE BEAR MARKET FOR NSE1. From the high of 6026, the NSE 20 Share index has fallen in five waves (i.e waves 1, 2, 3, 4 and 5). From the low of March 2009 (at 2576 points), the NSE has moved in 3 waves. Or, at the very least, the move from the part I've labelled A to the part labelled B cannot be considered an impulse wave due to overlap. The Elliott wave pattern that has such characteristics is called a ZIGZAG. A Zigzag is a three wave move that subdivides 5-3-5. So presently we have 5 waves down from the 6026 high, thus forming wave A. Wave B is the three wave move from the low of March 2009 at 2576 to present levels. What remains is another five wave down which is likely to take the 2576 low!!! 2. Also note the DIVERGENCE between the RSI and the highs that the NSE is making presently. 3. From the low of Sept. 2002 to the high of Jan 2007 NSE had a gain of 5017 (i.e 6026-1009) points over a 5 year period. From the low of March 2009 to presently, the NSE has only gained about 2497 points (i.e 5073-2576) over a 5 year period. This is about half the gain of 2002-2007. So we now have a market which shows weakness in breadth apart from not making a new high beyond 6026 points. 4. Economically Kenya has one of the highest taxation levels with little efficiency. Electricity prices are high etc etc. Our debt obligation, though not necessarily un-manageable at this point, has accelerated over the past few years. Alot of grand projects are being announced which appear to be good news. In Elliott analysis complacency usually reigns at the very top of a move. CONCLUSION NSE 20 Share index is over-extended and it is time for a big correction in the market. Regards to all. Granted. It is quite difficult for most people to appreciate Elliott Waves, leave alone accepting its utility! As an Elliottician, I understand this perfectly. At major market junctures Elliotticians are contrarians i.e when the waves suggest that a TOP is in place and people should Sell, that is when the MAJORITY are buying (and attacking the Elliottician for suggesting a scenario different to their belief). The opposite happens at market bottoms - the majority become net Sellers when Elliott would suggest Buying. You can see evidence of this from post no. 1 in this thread. NSE 20 share Index was trending upwards of 5000s yet I was resolute of impending doom. Stating the case for a MAJOR bear market brought alot of attacks on me, some even personal. It can be painful but only Elliott gives me market context to understand the reason why these things happen. NOW, I am saying that Safaricom is at a major TOP and I'll post a chart with the analysis. If you bought the share at say 5 bob and now it is currently at 18 bob then if you are in the market to make money then this is your chance to bail out. Waiting will give you ulcers. Conventional thinkers waste time building shelters when they are unnecessary and then have no shelters when they need them the most. Socionomists do the opposite.
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Rank: Elder Joined: 10/11/2006 Posts: 2,304
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aemathenge wrote:I know I am good in English, but I need a translation for what Mr. Bodo is talking about in his article: Link: Bottom of page one. Quote:I (George Bodo) have been constructing some paraphernalia — but within the technical analysis realm.
One of them which I’ve been trying to dry run is the advance-decline line.
It’s a simple tool for measuring market breadth and internal strength.
You always want to know whether a stock market rally is strong or just a short-lived passing cloud and vice versa.
Link: Page TwoQuote:It can be defined as the cumulative sum of:
advancers (stocks closing a trading day on a positive note)
minus
decliners. (stocks closing the trading day on negative note).
On days when the number of advancers exceeds the number of decliners, the advance-decline line will rise.
And on days when decliners exceed advancers, the line will fall.
However, the importance of this indicator lies in spotting a divergence.
Ordinarily, the breadth line should replicate a stock market index to the extent that when an index is rising, the line also rises — and vice versa.
However, in a case where an index is rising while the line is falling, that’s called a negative divergence; and the rally is probably being fuelled by just a few big stocks.
When a stock index is touching new highs while the AD line is falling, that signals weak market internals and the rally is nearing an end.
I recently constructed an AD line for the NSE and put this hypothesis to test, with an interesting result.
Based on my readings, the market topped in February 2015.
But before that, it was preceded by two negative divergences, albeit minor. Since then, the market has been on a downdraft with both the NSE 20-share and All-Share indices losing 45 per cent and 30 per cent respectively, peak-to-trough.
Effectively, it means that if you had spotted those two negative divergences, you needed to have exited or at least reduced your exposures.
Mr. Bodo is LATE with his analysis surely! Conventional thinkers waste time building shelters when they are unnecessary and then have no shelters when they need them the most. Socionomists do the opposite.
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Rank: Elder Joined: 10/11/2006 Posts: 2,304
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mnandii wrote:Taking cue from our original post no. 1 here we now have an updated NSE 20 Share Index Chart below.  Note that these are Weekly data points. Our wave B completed and now the market is falling in wave C as per our original forecast three years ago. If wave C completes at a point where it is the same length as wave A (Wave A = 6026 - 2576 ), then we should expect the current bear market to bottom at about 1700 level (the blue dashed line). I'll post a daily chart to zoom in on the falling impulse wave which is in blue wave [iii]. Closer look shortly. Conventional thinkers waste time building shelters when they are unnecessary and then have no shelters when they need them the most. Socionomists do the opposite.
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Rank: Elder Joined: 10/11/2006 Posts: 2,304
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 Wave B (black and in bold) completed at about 5490. From then the market has been falling impulsively. Waves [i] and [ii] (in blue colour) are in place. Wave [iii] is developing and is composed of RED waves (i) (ii) (iii) (iv) and a developing wave (v) (which will also mark the end of wave [iii]. NSE 20 share Index is as of this writing at 2873 level. The sharp declines have been due to third waves - the market is currently at wave iii of (v) of [iii]. This conjunction of thirds is the reason for the sharp declines - forget the laws that some people are suggesting to be the reason for the market fall. I'll zoom in more to give a more thorough breakdown of the wave structure and to suggest a likely bottom for wave [iii]. Please note that when wave [iii] bottoms we should expect a sideways consolidation in wave [iv] before resumption of the trend in final wave [v]. Conventional thinkers waste time building shelters when they are unnecessary and then have no shelters when they need them the most. Socionomists do the opposite.
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Rank: Elder Joined: 10/11/2006 Posts: 2,304
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 This is the zoomed in plot of the waves depicting a breakdown of blue wave [iii]. It can be seen that red waves (i) (ii) (iii) and (iv) are complete. The market is now tracing out RED wave (v) which is composed of GREEN waves i, ii and a developing wave iii. Wave iii may still have some way to go down before completing then a consolidation in wave iv then resumption of downtrend in green wave v, of red wave (v), of blue wave [iii]. I have added some lines to depict the scenario that I expect to play out for waves iv then v. Conventional thinkers waste time building shelters when they are unnecessary and then have no shelters when they need them the most. Socionomists do the opposite.
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Rank: Elder Joined: 10/11/2006 Posts: 2,304
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mnandii wrote:This is the zoomed in plot of the waves depicting a breakdown of blue wave [iii]. It can be seen that red waves (i) (ii) (iii) and (iv) are complete. The market is now tracing out RED wave (v) which is composed of GREEN waves i, ii and a developing wave iii. Wave iii may still have some way to go down before completing then a consolidation in wave iv then resumption of downtrend in green wave v, of red wave (v), of blue wave [iii]. I have added some lines to depict the scenario that I expect to play out for waves iv then v.  The Start of green wave i is where the arrow is pointing at 3291. Green wave i ended at 3105. Therefore: wave i = (3291 - 3105) = 186 points. wave ii =(3186 - 3105) = 81 points Third waves are usually Fibonacci 1.618, twice or 2.618 X wave 1. Therefore we should expect green wave iii to bottom at following levels: (3186 - (1.618 X 186)) = 2885 (which has already been surpassed) (3186 - (2 X 186)) = 2814(3186 - (2.618 X 186)) = 2699So now we look to the two levels i.e. 2814 and 2699 as possible ends of green wave iii. When wave iii is in place you should then expect a sideways consolidation in green wave iv before resumption of the downtrend in green wave v. Conventional thinkers waste time building shelters when they are unnecessary and then have no shelters when they need them the most. Socionomists do the opposite.
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Rank: Elder Joined: 10/11/2006 Posts: 2,304
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You can always Right Click on image > Open in New Tab to see the image better. Conventional thinkers waste time building shelters when they are unnecessary and then have no shelters when they need them the most. Socionomists do the opposite.
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Rank: Elder Joined: 6/23/2009 Posts: 13,475 Location: nairobi
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@mnadii I believe in your cartoonery
HF 30,000 ABP 3.49; KQ 414,100 ABP 7.92; MTN 15,750 ABP 6.45
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Rank: Veteran Joined: 11/14/2006 Posts: 1,311
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lochaz-index wrote:Liv wrote:Why is NSE index below 3000 and getting worse? Why is KES deteriorating?
My view; it can be challenged
All these are due to the uncertainty of the 2017 elections. Many of the foreigners and kenyans (read Asians) who are major investors in this country are taking cover. They have not only stopped investing but they are taking funds out of kenya until the elections take place and the country settles down politically.
If we manage to transit through this uncertainty safely in August and there are no chaos equivalent to or worse than 2007/2008, most of these funds will be returned here and I am sure the Index will hit 3500 or above by Dec 2017.
All the other factors like inflation, drought, debt levels, etc are just not as significant.
During the pre- election period the NSE provides great prices for great returns in 2018.
What has been ailing the market from early 2015 till end of 2016 where it has shed about 2500 points or approximately 45% from a peak @5500 level? Do you still aver that politics has been the underlying issue all along...three years on the trot?
The 911 moment for Kenya happened on 21 September 2013, the terror attack at Westgate mall in the heart of the capital city. I doubt the consequences of that event to the economy have been fully documented....but the fear and uncertainty it brought to this country and particularly to investors and owners of capital resulted in a big dent to the economy and expected growth. Tourism went to down to zero, UN and many embassies cut their staff residing in Nairobi, some economically influential Kenyan families relocated to Canada and UK and the effect of all these were clear one year later towards end of 2014 with profit warnings and lower returns expectation at NSE. After west gate we had a few other attacks in kenya and a big one on 2nd April 2015 at Garissa university college. Just like 911 affected the USA contributing to 2008 financial meltdown among other factors, the effect of terror on the Kenyan economy has been very significant and in my opinion has contributed greatly to the bear since early 2015.
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Rank: Chief Joined: 1/3/2007 Posts: 18,055 Location: Nairobi
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@mnandii - Just the index or specific shares is expected to fall with wave 5? Greedy when others are fearful. Very fearful when others are greedy - to paraphrase Warren Buffett
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Rank: Elder Joined: 6/23/2009 Posts: 13,475 Location: nairobi
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Liv wrote:lochaz-index wrote:Liv wrote:Why is NSE index below 3000 and getting worse? Why is KES deteriorating?
My view; it can be challenged
All these are due to the uncertainty of the 2017 elections. Many of the foreigners and kenyans (read Asians) who are major investors in this country are taking cover. They have not only stopped investing but they are taking funds out of kenya until the elections take place and the country settles down politically.
If we manage to transit through this uncertainty safely in August and there are no chaos equivalent to or worse than 2007/2008, most of these funds will be returned here and I am sure the Index will hit 3500 or above by Dec 2017.
All the other factors like inflation, drought, debt levels, etc are just not as significant.
During the pre- election period the NSE provides great prices for great returns in 2018.
What has been ailing the market from early 2015 till end of 2016 where it has shed about 2500 points or approximately 45% from a peak @5500 level? Do you still aver that politics has been the underlying issue all along...three years on the trot?
The 911 moment for Kenya happened on 21 September 2013, the terror attack at Westgate mall in the heart of the capital city. I doubt the consequences of that event to the economy have been fully documented....but the fear and uncertainty it brought to this country and particularly to investors and owners of capital resulted in a big dent to the economy and expected growth. Tourism went to down to zero, UN and many embassies cut their staff residing in Nairobi, some economically influential Kenyan families relocated to Canada and UK and the effect of all these were clear one year later towards end of 2014 with profit warnings and lower returns expectation at NSE. After west gate we had a few other attacks in kenya and a big one on 2nd April 2015 at Garissa university college. Just like 911 affected the USA contributing to 2008 financial meltdown among other factors, the effect of terror on the Kenyan economy has been very significant and in my opinion has contributed greatly to the bear since early 2015. Never looked at it that way.. Interesting view on matters
HF 30,000 ABP 3.49; KQ 414,100 ABP 7.92; MTN 15,750 ABP 6.45
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Rank: Member Joined: 5/30/2016 Posts: 332 Location: Kayole
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mnandii wrote:mnandii wrote:Taking cue from our original post no. 1 here we now have an updated NSE 20 Share Index Chart below. Note that these are Weekly data points. Our wave B completed and now the market is falling in wave C as per our original forecast three years ago. If wave C completes at a point where it is the same length as wave A (Wave A = 6026 - 2576 ), then we should expect the current bear market to bottom at about 1700 level (the blue dashed line). I'll post a daily chart to zoom in on the falling impulse wave which is in blue wave [iii]. Closer look shortly. @prophet mnandii I finally accepted the vision forecast in october last year and sold off large portions which has saved me quite a lot. Let us know when you see the new wave upwards is going to begin after we bottom out KEGN, KPLC, KQ, SCOM
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Rank: Elder Joined: 4/22/2010 Posts: 11,522 Location: Nairobi
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mkate_nusu wrote:mnandii wrote:mnandii wrote:Taking cue from our original post no. 1 here we now have an updated NSE 20 Share Index Chart below. Note that these are Weekly data points. Our wave B completed and now the market is falling in wave C as per our original forecast three years ago. If wave C completes at a point where it is the same length as wave A (Wave A = 6026 - 2576 ), then we should expect the current bear market to bottom at about 1700 level (the blue dashed line). I'll post a daily chart to zoom in on the falling impulse wave which is in blue wave [iii]. Closer look shortly. @prophet mnandii I finally accepted the vision forecast in october last year and sold off large portions which has saved me quite a lot. Let us know when you see the new wave upwards is going to begin after we bottom out Wololo 1700  possunt quia posse videntur
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Rank: Chief Joined: 8/4/2010 Posts: 8,977
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maka wrote:mkate_nusu wrote:mnandii wrote:mnandii wrote:Taking cue from our original post no. 1 here we now have an updated NSE 20 Share Index Chart below. Note that these are Weekly data points. Our wave B completed and now the market is falling in wave C as per our original forecast three years ago. If wave C completes at a point where it is the same length as wave A (Wave A = 6026 - 2576 ), then we should expect the current bear market to bottom at about 1700 level (the blue dashed line). I'll post a daily chart to zoom in on the falling impulse wave which is in blue wave [iii]. Closer look shortly. @prophet mnandii I finally accepted the vision forecast in october last year and sold off large portions which has saved me quite a lot. Let us know when you see the new wave upwards is going to begin after we bottom out Wololo 1700 By the time the index breaks below 2300 expect a lot of civil unrest which can easily propel the index below 2000!
I wonder where @mukiri went. I hope he is fine. $15/barrel oil... The commodities lehman moment arrives as well as Sovereign debt volcano!
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Rank: Chief Joined: 8/4/2010 Posts: 8,977
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obiero wrote:@mnadii I believe in your cartoonery Brother @obiero welcome to world of cartoon wizardry  $15/barrel oil... The commodities lehman moment arrives as well as Sovereign debt volcano!
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Rank: Chief Joined: 1/3/2007 Posts: 18,055 Location: Nairobi
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hisah wrote:maka wrote:mkate_nusu wrote:mnandii wrote:mnandii wrote:Taking cue from our original post no. 1 here we now have an updated NSE 20 Share Index Chart below. Note that these are Weekly data points. Our wave B completed and now the market is falling in wave C as per our original forecast three years ago. If wave C completes at a point where it is the same length as wave A (Wave A = 6026 - 2576 ), then we should expect the current bear market to bottom at about 1700 level (the blue dashed line). I'll post a daily chart to zoom in on the falling impulse wave which is in blue wave [iii]. Closer look shortly. @prophet mnandii I finally accepted the vision forecast in october last year and sold off large portions which has saved me quite a lot. Let us know when you see the new wave upwards is going to begin after we bottom out Wololo 1700 By the time the index breaks below 2300 expect a lot of civil unrest which can easily propel the index below 2000!
I wonder where @mukiri went. I hope he is fine. Wouldn't this be a case of the tail wagging the dog? A drop in the index due to "riots" [think PEV 2008 and the subsequent severe bear in 2009] due to a toxic business environment that affects sales/profits of listed firms. Why would there be unrest in Kenya on account of the index dropping when: - Less than 20% of the "investing" population have shares - Even fewer have a significant part of their portfolio in shares (most Kenyans have "land" not shares as their primary investment.) - Over 50% of all CDSC accounts are inactive. - Those who are active (or have significant shares) are unlikely to riot or cause unrest. Greedy when others are fearful. Very fearful when others are greedy - to paraphrase Warren Buffett
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Rank: Veteran Joined: 11/14/2006 Posts: 1,311
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Liv wrote:lochaz-index wrote:Liv wrote:Why is NSE index below 3000 and getting worse? Why is KES deteriorating?
My view; it can be challenged
All these are due to the uncertainty of the 2017 elections. Many of the foreigners and kenyans (read Asians) who are major investors in this country are taking cover. They have not only stopped investing but they are taking funds out of kenya until the elections take place and the country settles down politically.
If we manage to transit through this uncertainty safely in August and there are no chaos equivalent to or worse than 2007/2008, most of these funds will be returned here and I am sure the Index will hit 3500 or above by Dec 2017.
All the other factors like inflation, drought, debt levels, etc are just not as significant.
During the pre- election period the NSE provides great prices for great returns in 2018.
What has been ailing the market from early 2015 till end of 2016 where it has shed about 2500 points or approximately 45% from a peak @5500 level? Do you still aver that politics has been the underlying issue all along...three years on the trot?
The 911 moment for Kenya happened on 21 September 2013, the terror attack at Westgate mall in the heart of the capital city. I doubt the consequences of that event to the economy have been fully documented....but the fear and uncertainty it brought to this country and particularly to investors and owners of capital resulted in a big dent to the economy and expected growth. Tourism went to down to zero, UN and many embassies cut their staff residing in Nairobi, some economically influential Kenyan families relocated to Canada and UK and the effect of all these were clear one year later towards end of 2014 with profit warnings and lower returns expectation at NSE. After west gate we had a few other attacks in kenya and a big one on 2nd April 2015 at Garissa university college. Just like 911 affected the USA contributing to 2008 financial meltdown among other factors, the effect of terror on the Kenyan economy has been very significant and in my opinion has contributed greatly to the bear since early 2015.
The Economy was on recovery in 2016 ..... There was increased confidence in the country and tourism had started taking off again after major conferences were held in kenya ....by sept 2016 the blogs here were about double bottom for NSE index (after it rose from 2011 level) and the Bulls were confident again.. Then the surprise signing of the interest capping law happened.....and that took the index towards lower 30000s.
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Rank: Chief Joined: 1/3/2007 Posts: 18,055 Location: Nairobi
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Liv wrote:Liv wrote:lochaz-index wrote:Liv wrote:Why is NSE index below 3000 and getting worse? Why is KES deteriorating?
My view; it can be challenged
All these are due to the uncertainty of the 2017 elections. Many of the foreigners and kenyans (read Asians) who are major investors in this country are taking cover. They have not only stopped investing but they are taking funds out of kenya until the elections take place and the country settles down politically.
If we manage to transit through this uncertainty safely in August and there are no chaos equivalent to or worse than 2007/2008, most of these funds will be returned here and I am sure the Index will hit 3500 or above by Dec 2017.
All the other factors like inflation, drought, debt levels, etc are just not as significant.
During the pre- election period the NSE provides great prices for great returns in 2018.
What has been ailing the market from early 2015 till end of 2016 where it has shed about 2500 points or approximately 45% from a peak @5500 level? Do you still aver that politics has been the underlying issue all along...three years on the trot?
The 911 moment for Kenya happened on 21 September 2013, the terror attack at Westgate mall in the heart of the capital city. I doubt the consequences of that event to the economy have been fully documented....but the fear and uncertainty it brought to this country and particularly to investors and owners of capital resulted in a big dent to the economy and expected growth. Tourism went to down to zero, UN and many embassies cut their staff residing in Nairobi, some economically influential Kenyan families relocated to Canada and UK and the effect of all these were clear one year later towards end of 2014 with profit warnings and lower returns expectation at NSE. After west gate we had a few other attacks in kenya and a big one on 2nd April 2015 at Garissa university college. Just like 911 affected the USA contributing to 2008 financial meltdown among other factors, the effect of terror on the Kenyan economy has been very significant and in my opinion has contributed greatly to the bear since early 2015.
The Economy was on recovery in 2016 ..... There was increased confidence in the country and tourism had started taking off again after major conferences were held in kenya ....by sept 2016 the blogs here were about double bottom for NSE index (after it rose from 2011 level) and the Bulls were confident again.. Then the surprise signing of the interest capping law happened.....and that took the index towards lower 30000s. I wish!  ... I think the cost of the SGR started sinking in in 2016. $4bn from the Chinese. Another $2bn in land compensation. GoK started borrowing like a drunken sailor. Then there was NYS that exposed the corruption that we were told was under control. All these "costs" will make life harder for listed firms. At the Unga AGM, the CEO said they haven't seen the 6% GDP growth in their business. Whereas, I expect Unga to do better in 2017 vs 2016, I think that's more to do with the reforms/restructuring, new products and investments starting to pay off rather than a tailwind from the 6% GDP growth that's being touted. Greedy when others are fearful. Very fearful when others are greedy - to paraphrase Warren Buffett
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Elliott Wave Analysis Of The NSE 20
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