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Elliott Wave Analysis Of The NSE 20
Rank: Member Joined: 9/14/2011 Posts: 834 Location: nairobi
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lochaz-index wrote:Looking at the top three banks' results, Kcb is the outlier. While Equity and Coop have taken a serious beat down, Kcb merely got bruised. They must have pulled some neat business in Q4 to stay the execution. Question would be whether they can keep it up as the competition falls further behind...I have my doubts mainly due to the bulging statutory loan loss reserve.
Q1 2017 will be worse than Q4 2016 earnings wise. Assuming the same trajectory throughout the year, FY2017 should come in at about half FY 2016 earnings!
The top three banks are all risk-on when it comes to Wanjiku lending, the cap law will slow them down the most. The risk averse aka Barclays, Stanchart, Stanbic should fair better in the short term. Equity's liquidity ratios suggests a profound change in strategy to a risk-off model. Whether that is a coping/short term mechanism to navigate the capping or is a permanent change remains to be seen. My thinking is that they are building a buffer for any shocks stemming from their loan book.
When the cap law is lifted, expect a massive NPL washout/credit impairment/charge offs especially for the banks with a large number of Wanjikus in their loan book. Depending on when the law is scrapped, that could make a serious dent on FY2017 or FY2018. So banks are not yet out of the woods not by a long shot.
Under the same macro conditions, if interest rates are allowed to revert to the pre-cap era, some borrowers who were borderline delinquent in the capping regime will definitely default. Since the economy will not be making a quick recovery and refinancing will be problematic as it is now, many borrowers will be unable to sustain repayments hence the anticipated write offs. I am confused here. i thought the cure for the banks is lifting the interest rate caps and we make loads of cash if we buy before the lift?
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Rank: Veteran Joined: 8/28/2015 Posts: 1,247
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heri wrote:lochaz-index wrote:Looking at the top three banks' results, Kcb is the outlier. While Equity and Coop have taken a serious beat down, Kcb merely got bruised. They must have pulled some neat business in Q4 to stay the execution. Question would be whether they can keep it up as the competition falls further behind...I have my doubts mainly due to the bulging statutory loan loss reserve.
Q1 2017 will be worse than Q4 2016 earnings wise. Assuming the same trajectory throughout the year, FY2017 should come in at about half FY 2016 earnings!
The top three banks are all risk-on when it comes to Wanjiku lending, the cap law will slow them down the most. The risk averse aka Barclays, Stanchart, Stanbic should fair better in the short term. Equity's liquidity ratios suggests a profound change in strategy to a risk-off model. Whether that is a coping/short term mechanism to navigate the capping or is a permanent change remains to be seen. My thinking is that they are building a buffer for any shocks stemming from their loan book.
When the cap law is lifted, expect a massive NPL washout/credit impairment/charge offs especially for the banks with a large number of Wanjikus in their loan book. Depending on when the law is scrapped, that could make a serious dent on FY2017 or FY2018. So banks are not yet out of the woods not by a long shot.
Under the same macro conditions, if interest rates are allowed to revert to the pre-cap era, some borrowers who were borderline delinquent in the capping regime will definitely default. Since the economy will not be making a quick recovery and refinancing will be problematic as it is now, many borrowers will be unable to sustain repayments hence the anticipated write offs. I am confused here. i thought the cure for the banks is lifting the interest rate caps and we make loads of cash if we buy before the lift? Well put. Borderline caused the upheavals of writing the caplaw. Banks won't and will not form the fuel to the next bull run. Think manufacturing or elsewhere. Hard nut to crack. Nah!! ,Behold, a sower went forth to sow;....
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Rank: Chief Joined: 1/13/2011 Posts: 5,964
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@muandiwambeu must tell us how to oscillate between coherence-incoherence. Asiseme ni T9! 
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Rank: Veteran Joined: 9/18/2014 Posts: 1,127
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heri wrote:lochaz-index wrote:Looking at the top three banks' results, Kcb is the outlier. While Equity and Coop have taken a serious beat down, Kcb merely got bruised. They must have pulled some neat business in Q4 to stay the execution. Question would be whether they can keep it up as the competition falls further behind...I have my doubts mainly due to the bulging statutory loan loss reserve.
Q1 2017 will be worse than Q4 2016 earnings wise. Assuming the same trajectory throughout the year, FY2017 should come in at about half FY 2016 earnings!
The top three banks are all risk-on when it comes to Wanjiku lending, the cap law will slow them down the most. The risk averse aka Barclays, Stanchart, Stanbic should fair better in the short term. Equity's liquidity ratios suggests a profound change in strategy to a risk-off model. Whether that is a coping/short term mechanism to navigate the capping or is a permanent change remains to be seen. My thinking is that they are building a buffer for any shocks stemming from their loan book.
When the cap law is lifted, expect a massive NPL washout/credit impairment/charge offs especially for the banks with a large number of Wanjikus in their loan book. Depending on when the law is scrapped, that could make a serious dent on FY2017 or FY2018. So banks are not yet out of the woods not by a long shot.
Under the same macro conditions, if interest rates are allowed to revert to the pre-cap era, some borrowers who were borderline delinquent in the capping regime will definitely default. Since the economy will not be making a quick recovery and refinancing will be problematic as it is now, many borrowers will be unable to sustain repayments hence the anticipated write offs. I am confused here. i thought the cure for the banks is lifting the interest rate caps and we make loads of cash if we buy before the lift? Scrapping the cap law is not a panacea to all the ills afflicting KE. The economy is on a slow grind and with it comes systemic risk which trumps sector specific ones. Banks won't increase lending in an environment of heightened default risk. Put differently, take an example of a borrower who is currently enjoying reduced repayments on his/her loan thanks to the caps @14%. However, since the macros are worsening, his/her savings get chewed due to increase in inflation/rising cost of living. In addition, reduced earnings for businesses mean more layoffs meaning as a whole more and more people are struggling to service their loans. If the law is reversed, average interest rates float to assume 18%, what do you think will happen to some borrowers and by extension the banks' NPLs? The main purpose of the stock market is to make fools of as many people as possible.
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Rank: Elder Joined: 9/23/2009 Posts: 8,083 Location: Enk are Nyirobi
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lochaz-index wrote:heri wrote:lochaz-index wrote:Looking at the top three banks' results, Kcb is the outlier. While Equity and Coop have taken a serious beat down, Kcb merely got bruised. They must have pulled some neat business in Q4 to stay the execution. Question would be whether they can keep it up as the competition falls further behind...I have my doubts mainly due to the bulging statutory loan loss reserve.
Q1 2017 will be worse than Q4 2016 earnings wise. Assuming the same trajectory throughout the year, FY2017 should come in at about half FY 2016 earnings!
The top three banks are all risk-on when it comes to Wanjiku lending, the cap law will slow them down the most. The risk averse aka Barclays, Stanchart, Stanbic should fair better in the short term. Equity's liquidity ratios suggests a profound change in strategy to a risk-off model. Whether that is a coping/short term mechanism to navigate the capping or is a permanent change remains to be seen. My thinking is that they are building a buffer for any shocks stemming from their loan book.
When the cap law is lifted, expect a massive NPL washout/credit impairment/charge offs especially for the banks with a large number of Wanjikus in their loan book. Depending on when the law is scrapped, that could make a serious dent on FY2017 or FY2018. So banks are not yet out of the woods not by a long shot.
Under the same macro conditions, if interest rates are allowed to revert to the pre-cap era, some borrowers who were borderline delinquent in the capping regime will definitely default. Since the economy will not be making a quick recovery and refinancing will be problematic as it is now, many borrowers will be unable to sustain repayments hence the anticipated write offs. I am confused here. i thought the cure for the banks is lifting the interest rate caps and we make loads of cash if we buy before the lift? Scrapping the cap law is not a panacea to all the ills afflicting KE. The economy is on a slow grind and with it comes systemic risk which trumps sector specific ones. Banks won't increase lending in an environment of heightened default risk. Put differently, take an example of a borrower who is currently enjoying reduced repayments on his/her loan thanks to the caps @14%. However, since the macros are worsening, his/her savings get chewed due to increase in inflation/rising cost of living. In addition, reduced earnings for businesses mean more layoffs meaning as a whole more and more people are struggling to service their loans. If the law is reversed, average interest rates float to assume 18%, what do you think will happen to some borrowers and by extension the banks' NPLs? KCB mean lending rates to the big corporate borrowers was around 12%-14% even before the rate cap. The FDR rates were also between 7%-10% depending on tenor and quantum. Probably the reason they were not clobbered. Life is short. Live passionately.
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Rank: Chief Joined: 8/4/2010 Posts: 8,977
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hisah wrote:hisah wrote:hisah wrote:obiero wrote:VituVingiSana wrote:hisah wrote:@mnandii, SPT, sparkly have a look at the NBK long term chart. Can you spot the falling wedge breakout!!! The price will plunge very sharply! With the current drama unfolding in the banking sector I'm keenly following this counter. GoK debt drama and this gok bank promise to stage a nice thriller. NBK has issues regardless of high T-Bill rates or a bear market. It is under-capitalized [poor CARs] and lives on the largesse of GoK. If its loan book was assessed using metrics of more conservative banks, it would be closed down faster than Imperial Bank! True. That is why GoK will soon combine NBK, Consolidated and Development banks. In a few months.. Wedge breakout to the downside as price prints below 15 handle to close at 14.80. Sharp plunge coming up!
Post #1160: Posted : Wednesday, November 04, 2015 3:48:43 PM
The wedge formation finally had its breakout and NBK prices have collapsed as expected and tested the 8.00 handle on the spike selloff. Wedge breakouts are powerful. More selling pressure is coming!
The banking thriller has been as expected. We still have the gok debt thriller coming up. Caution in this market. Bears still going strong as the counter slips below the 9.00 handle. All time low at 8.00.
NSE20 is back at the April 14 level at 3901 as it closed at 3916. Below this level next support is 3850 then 3795. If bears push things further 3745 the low of the year (Jan 26) is the next target. Then we're off to new lows towards 3500 then 3300 and an overshoot at 3155 (the November 2011 low).
I'll keep stressing it, caution in this market. 2015 was bearish, but a slow bear. The real bear mauls rapidly. That capitulation (rollercoaster to hell) is what usually marks market bottoms. @cde I found the threads for the Nov 2015 post on NBK bearish behaviour. Fell to a low of 5.40 and currently trading 6.25.
GoK debt drama currently in play as obligations balloon with bonds getting cancelled, tax collection below target, tanking economy and spiced up with a credit squeeze courtesy of the rate cap.
Charts wizardry $15/barrel oil... The commodities lehman moment arrives as well as Sovereign debt volcano!
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Rank: Chief Joined: 1/13/2011 Posts: 5,964
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Look at that. 40 a share. I remember that Dec holz of 2012. Crickets on the bid, New Year swinger!!
Eih, with moral compass, when baba na mama-GoK backs betting for 17/18 funding what do you think?
Cautiously optimistic.
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Rank: Member Joined: 9/14/2011 Posts: 834 Location: nairobi
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lochaz-index wrote:heri wrote:lochaz-index wrote:Looking at the top three banks' results, Kcb is the outlier. While Equity and Coop have taken a serious beat down, Kcb merely got bruised. They must have pulled some neat business in Q4 to stay the execution. Question would be whether they can keep it up as the competition falls further behind...I have my doubts mainly due to the bulging statutory loan loss reserve.
Q1 2017 will be worse than Q4 2016 earnings wise. Assuming the same trajectory throughout the year, FY2017 should come in at about half FY 2016 earnings!
The top three banks are all risk-on when it comes to Wanjiku lending, the cap law will slow them down the most. The risk averse aka Barclays, Stanchart, Stanbic should fair better in the short term. Equity's liquidity ratios suggests a profound change in strategy to a risk-off model. Whether that is a coping/short term mechanism to navigate the capping or is a permanent change remains to be seen. My thinking is that they are building a buffer for any shocks stemming from their loan book.
When the cap law is lifted, expect a massive NPL washout/credit impairment/charge offs especially for the banks with a large number of Wanjikus in their loan book. Depending on when the law is scrapped, that could make a serious dent on FY2017 or FY2018. So banks are not yet out of the woods not by a long shot.
Under the same macro conditions, if interest rates are allowed to revert to the pre-cap era, some borrowers who were borderline delinquent in the capping regime will definitely default. Since the economy will not be making a quick recovery and refinancing will be problematic as it is now, many borrowers will be unable to sustain repayments hence the anticipated write offs. I am confused here. i thought the cure for the banks is lifting the interest rate caps and we make loads of cash if we buy before the lift? Scrapping the cap law is not a panacea to all the ills afflicting KE. The economy is on a slow grind and with it comes systemic risk which trumps sector specific ones. Banks won't increase lending in an environment of heightened default risk. Put differently, take an example of a borrower who is currently enjoying reduced repayments on his/her loan thanks to the caps @14%. However, since the macros are worsening, his/her savings get chewed due to increase in inflation/rising cost of living. In addition, reduced earnings for businesses mean more layoffs meaning as a whole more and more people are struggling to service their loans. If the law is reversed, average interest rates float to assume 18%, what do you think will happen to some borrowers and by extension the banks' NPLs? Thanks i see now what you mean. Its more about how the KE economy is doing
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Rank: Elder Joined: 7/11/2010 Posts: 5,040
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hisah wrote:hisah wrote:hisah wrote:hisah wrote:obiero wrote:VituVingiSana wrote:hisah wrote:@mnandii, SPT, sparkly have a look at the NBK long term chart. Can you spot the falling wedge breakout!!! The price will plunge very sharply! With the current drama unfolding in the banking sector I'm keenly following this counter. GoK debt drama and this gok bank promise to stage a nice thriller. NBK has issues regardless of high T-Bill rates or a bear market. It is under-capitalized [poor CARs] and lives on the largesse of GoK. If its loan book was assessed using metrics of more conservative banks, it would be closed down faster than Imperial Bank! True. That is why GoK will soon combine NBK, Consolidated and Development banks. In a few months.. Wedge breakout to the downside as price prints below 15 handle to close at 14.80. Sharp plunge coming up!
Post #1160: Posted : Wednesday, November 04, 2015 3:48:43 PM
The wedge formation finally had its breakout and NBK prices have collapsed as expected and tested the 8.00 handle on the spike selloff. Wedge breakouts are powerful. More selling pressure is coming!
The banking thriller has been as expected. We still have the gok debt thriller coming up. Caution in this market. Bears still going strong as the counter slips below the 9.00 handle. All time low at 8.00.
NSE20 is back at the April 14 level at 3901 as it closed at 3916. Below this level next support is 3850 then 3795. If bears push things further 3745 the low of the year (Jan 26) is the next target. Then we're off to new lows towards 3500 then 3300 and an overshoot at 3155 (the November 2011 low).
I'll keep stressing it, caution in this market. 2015 was bearish, but a slow bear. The real bear mauls rapidly. That capitulation (rollercoaster to hell) is what usually marks market bottoms. @cde I found the threads for the Nov 2015 post on NBK bearish behaviour. Fell to a low of 5.40 and currently trading 6.25.
GoK debt drama currently in play as obligations balloon with bonds getting cancelled, tax collection below target, tanking economy and spiced up with a credit squeeze courtesy of the rate cap.
Charts wizardry Another of your good calls. We finally saw the real bear as well! The investor's chief problem - and even his worst enemy - is likely to be himself
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Rank: Veteran Joined: 8/28/2015 Posts: 1,247
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@cde mono communicating is not just singing abcde..., its a skill of writing a and skipping b then jolt down c and jump d to do e and thus the ace of doing things. Probably, during the jump spectators won't be bemused at all.  Hii game requires very simple abilities, loadabilty, knowledge of when to pull the trigger and the plug. Finally, when to do the French leave. Hiyo ingine ni filterable noise. ,Behold, a sower went forth to sow;....
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Rank: Veteran Joined: 9/18/2014 Posts: 1,127
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sparkly wrote:lochaz-index wrote:heri wrote:lochaz-index wrote:Looking at the top three banks' results, Kcb is the outlier. While Equity and Coop have taken a serious beat down, Kcb merely got bruised. They must have pulled some neat business in Q4 to stay the execution. Question would be whether they can keep it up as the competition falls further behind...I have my doubts mainly due to the bulging statutory loan loss reserve.
Q1 2017 will be worse than Q4 2016 earnings wise. Assuming the same trajectory throughout the year, FY2017 should come in at about half FY 2016 earnings!
The top three banks are all risk-on when it comes to Wanjiku lending, the cap law will slow them down the most. The risk averse aka Barclays, Stanchart, Stanbic should fair better in the short term. Equity's liquidity ratios suggests a profound change in strategy to a risk-off model. Whether that is a coping/short term mechanism to navigate the capping or is a permanent change remains to be seen. My thinking is that they are building a buffer for any shocks stemming from their loan book.
When the cap law is lifted, expect a massive NPL washout/credit impairment/charge offs especially for the banks with a large number of Wanjikus in their loan book. Depending on when the law is scrapped, that could make a serious dent on FY2017 or FY2018. So banks are not yet out of the woods not by a long shot.
Under the same macro conditions, if interest rates are allowed to revert to the pre-cap era, some borrowers who were borderline delinquent in the capping regime will definitely default. Since the economy will not be making a quick recovery and refinancing will be problematic as it is now, many borrowers will be unable to sustain repayments hence the anticipated write offs. I am confused here. i thought the cure for the banks is lifting the interest rate caps and we make loads of cash if we buy before the lift? Scrapping the cap law is not a panacea to all the ills afflicting KE. The economy is on a slow grind and with it comes systemic risk which trumps sector specific ones. Banks won't increase lending in an environment of heightened default risk. Put differently, take an example of a borrower who is currently enjoying reduced repayments on his/her loan thanks to the caps @14%. However, since the macros are worsening, his/her savings get chewed due to increase in inflation/rising cost of living. In addition, reduced earnings for businesses mean more layoffs meaning as a whole more and more people are struggling to service their loans. If the law is reversed, average interest rates float to assume 18%, what do you think will happen to some borrowers and by extension the banks' NPLs? KCB mean lending rates to the big corporate borrowers was around 12%-14% even before the rate cap. The FDR rates were also between 7%-10% depending on tenor and quantum. Probably the reason they were not clobbered. Of all the banks that have reported results so far (including BBK and Stanbic), Kcb has taken the smallest hit in Q4 2016. BBK is huge on corporate lending and averse to individual(unless for big firm employees) and SME lending yet they also took a shaving. What propelled Equity, Kcb and Coop to the top of the food chain is the mass market which BBK and Stanchart were unwilling to engage. Therefore, I find it odd that they have stayed afloat as the rest fall behind. I still maintain their Q4 is an outlier hence very deceptive. Secondly, Kcb numbers imply that they have a better loan book - quality wise - than the rest(including BBK and Stanbic) vis a vis what has been a tough 2016 for most individuals and businesses. The ceo said that some two large borrowers (probably requiring provisions or prior provisioned) came good for them in Q4 - yet their loan loss reserves increased - which helped them paper over the deteriorating loan book...not a good/sustainable trend. That said, if Kcb can maintain the same numbers Q1 through to Q4 2017, then it's a wrap for the competitors coz that would amount to a very nifty coup de grace. Either way, we will know soon enough...@Q1 maybe. 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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 Five waves up in Safaricom. Expecting a move down to 14.35 to make wave 'A'. 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: Veteran Joined: 11/13/2015 Posts: 1,569
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mnandii wrote:Five waves up in Safaricom. Expecting a move down to 14.35 to make wave 'A'. very nice. Wave C takes us all the way to 10 
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Rank: Chief Joined: 8/4/2010 Posts: 8,977
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mnandii wrote:Five waves up in Safaricom. Expecting a move down to 14.35 to make wave 'A'. I'm watching this counter very keenly. It has a monthly uptrend stretching from 2013 to date. A close below 17.50 for the month will be a nasty sign for the price will close below the uptrend line after 4 years. This will be a hint that a sizable correction will be coming up. For bears to take over they need to break this uptrend.$15/barrel oil... The commodities lehman moment arrives as well as Sovereign debt volcano!
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Rank: Chief Joined: 1/13/2011 Posts: 5,964
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Rank: Elder Joined: 12/7/2012 Posts: 11,901
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https://youtu.be/-4xvDW0jeQE[/quote] Not convincing at all  In the business world, everyone is paid in two coins - cash and experience. Take the experience first; the cash will come later - H Geneen
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Rank: Chief Joined: 1/13/2011 Posts: 5,964
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@Angelica _ann? Mr Kenneth Otiato Marende LLB Hons, Dip Law – Chairman www.youtube.com/watch?v=t39ia9pqtUU&sns=twDr Ken Tarus Ag MD & CEO KPLC www.youtube.com/watch?v=WPLwFXPx5C8&sns=tw
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Rank: Elder Joined: 10/11/2006 Posts: 2,304
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Quote:Prolonged periods of zero-to-negative stock index performance are a sign that emerging disease outbreaks should be taken very seriously Allan Hall, Socionomics InstituteConventional 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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wukan wrote:mnandii wrote:Five waves up in Safaricom. Expecting a move down to 14.35 to make wave 'A'. very nice. Wave C takes us all the way to 10 Likely below 10. See how wave 2 retraced alot of wave 1. 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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hisah wrote:mnandii wrote:Five waves up in Safaricom. Expecting a move down to 14.35 to make wave 'A'. I'm watching this counter very keenly. It has a monthly uptrend stretching from 2013 to date. A close below 17.50 for the month will be a nasty sign for the price will close below the uptrend line after 4 years. This will be a hint that a sizable correction will be coming up. For bears to take over they need to break this uptrend. 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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