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Elliott Wave Analysis Of The NSE 20
Rank: Chief Joined: 1/3/2007 Posts: 18,050 Location: Nairobi
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@lochaz-index - It's a pity that GoK will have to sell their stakes at a throw-away price BUT it needs to get out of the business of Business. It should try to get rid of the bad apples like Mumias and Uchumi. Vodafone (or large funds) may be in the market for Safaricom. KenRe could find a strategic investor as long as GoK allows it to buy 51% Greedy when others are fearful. Very fearful when others are greedy - to paraphrase Warren Buffett
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Rank: Veteran Joined: 11/13/2015 Posts: 1,568
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Liv wrote:lochaz-index wrote:Just had a quick look at the finance bill (now law), the implications of the taxes will be devastating:
1. Money velocity is about to go to the dogs. Deflation in earnest really and it won't be kind to any asset class including the NSE.
2. Looks like KE won't be dodging a debt/fiscal crisis.
3. KES devaluation is now almost a certainty, the only question is when.
4. Political and civil upheaval is expected coz the only language treasury understands is increasing taxes. The other half of the 8% VAT will be imposed at the very latest in the 2019/20 budget.
5. Capital gains tax especially on real estate will be increased substantially.
I agree with your conclusion point 1 above based on the new law.
A). How do you come to the other 4 points in your conclusion based on the new law?
B) How does KES devaluation become a certainty in an environment of deflation?
C) conclusion point 4 is just wishful thinking in my view.... It will not happen in Kenya as we are so divided by tribe and we follow our tribal leaders.
A. Based on the level of desperation shown by Treasury to pass the new law...you get that nakumatt feeling. The market is pretty good at smelling desperation. The sharks will start gathering same way they did in Turkey and Argentina. We told IMF to f*** off with their insurance cover. B. @lochaz-index has previously posted that the interest rate cap operates like a currency peg. It's deflationary at at time when KE has piled up debt. It's also helping our current account by slowing down consumption of imports. It's almost like we are artificially propping KES. When the peg can't be defended because of reduced forex reserves then  for KES. You might see KES beyond 120. C. In 2002 it was "yote yawezekana" so let's just watch the unfolding events.
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Rank: Elder Joined: 10/11/2006 Posts: 2,304
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//Article How to Win Against the Dangerous “Herding Impulse”We all love a bargain… …Except when it comes to stocks. The reason boils down to uncertainty. We know what our fruits and vegetables should cost at the grocer’s — but we’re far less certain about how much to pay for a blue-chip stock or shares in an S&P 500 Index fund. So how does our mind work in decisions that involve certainty vs. uncertainty? Robert Prechter and Wayne Parker, co-authors of the paper, ”The Financial/Economic Dichotomy in Social Behavioral Dynamics: The Socionomic Perspective” (Journal of Behavioral Finance, Vol. 8, No. 2, pp. 84-108, 2007) explain that in each situation, very different regions of the brain take over — literally. Quote:When we spend money as consumers, we depend on the neocortex region of the brain, where our ability to reason resides. For example, if we shop for groceries and see our favorite fruit on sale at a 40 percent discount, we think “That’s a good deal. I make the best use of my money by buying it now.” And, if we hang around to watch how other shoppers behave, we see that particular item sell out sooner than usual. In other words: The demand for consumer goods rises as the price falls. But when we spend money as investors, our brain relies on the more primitive region — the basal ganglia — which drives unconscious behavior such as herding. Let’s say that 30 minutes after the stock market opens, we see that the blue-chip stock we own is down 20 percent. We know that shareholders are fleeing the stock. The basal ganglia screams, “They know something I don’t. I’d better sell too.” In this case, demand for the asset FALLS as the price falls. Why? Because in speculative markets, assets have no true utility. An investor buys it today in the hope that it will be worth more to another investor tomorrow. But that future value is uncertain, so the brain defaults to herding. The sketch of the brain shows the locations of the conscious, reasoning neocortex and the unconscious, impulsive lower areas:  In other words, herding impulses force you to “buy high — and sell low,” precisely the opposite of what you should be doing. Can you win? Yes. Instead of getting wrapped up in the day’s news, when you study the collective psychology of market participants, you see the markets objectively — and separate yourself from the herd. Want to learn more? Download “The Financial/Economic Dichotomy in Social Behavioral Dynamics: The Socionomic Perspective.” 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: 13,472 Location: nairobi
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mnandii wrote://Article How to Win Against the Dangerous “Herding Impulse”We all love a bargain… …Except when it comes to stocks. The reason boils down to uncertainty. We know what our fruits and vegetables should cost at the grocer’s — but we’re far less certain about how much to pay for a blue-chip stock or shares in an S&P 500 Index fund. So how does our mind work in decisions that involve certainty vs. uncertainty? Robert Prechter and Wayne Parker, co-authors of the paper, ”The Financial/Economic Dichotomy in Social Behavioral Dynamics: The Socionomic Perspective” (Journal of Behavioral Finance, Vol. 8, No. 2, pp. 84-108, 2007) explain that in each situation, very different regions of the brain take over — literally. Quote:When we spend money as consumers, we depend on the neocortex region of the brain, where our ability to reason resides. For example, if we shop for groceries and see our favorite fruit on sale at a 40 percent discount, we think “That’s a good deal. I make the best use of my money by buying it now.” And, if we hang around to watch how other shoppers behave, we see that particular item sell out sooner than usual. In other words: The demand for consumer goods rises as the price falls. But when we spend money as investors, our brain relies on the more primitive region — the basal ganglia — which drives unconscious behavior such as herding. Let’s say that 30 minutes after the stock market opens, we see that the blue-chip stock we own is down 20 percent. We know that shareholders are fleeing the stock. The basal ganglia screams, “They know something I don’t. I’d better sell too.” In this case, demand for the asset FALLS as the price falls. Why? Because in speculative markets, assets have no true utility. An investor buys it today in the hope that it will be worth more to another investor tomorrow. But that future value is uncertain, so the brain defaults to herding. The sketch of the brain shows the locations of the conscious, reasoning neocortex and the unconscious, impulsive lower areas: In other words, herding impulses force you to “buy high — and sell low,” precisely the opposite of what you should be doing. Can you win? Yes. Instead of getting wrapped up in the day’s news, when you study the collective psychology of market participants, you see the markets objectively — and separate yourself from the herd. Want to learn more? Download “The Financial/Economic Dichotomy in Social Behavioral Dynamics: The Socionomic Perspective.” Stay away from the herd. Good read. Thanks for the share
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: 9/18/2014 Posts: 1,127
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VituVingiSana wrote:@lochaz-index - It's a pity that GoK will have to sell their stakes at a throw-away price BUT it needs to get out of the business of Business.
It should try to get rid of the bad apples like Mumias and Uchumi.
Vodafone (or large funds) may be in the market for Safaricom.
KenRe could find a strategic investor as long as GoK allows it to buy 51% It is a damn shame for sure but when 'experts' bahave as if they can repeal the laws of economics or like they have never heard of them, unintended consequences tend to follow swiftly. The main purpose of the stock market is to make fools of as many people as possible.
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Rank: Veteran Joined: 9/18/2014 Posts: 1,127
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wukan wrote:Liv wrote:lochaz-index wrote:Just had a quick look at the finance bill (now law), the implications of the taxes will be devastating:
1. Money velocity is about to go to the dogs. Deflation in earnest really and it won't be kind to any asset class including the NSE.
2. Looks like KE won't be dodging a debt/fiscal crisis.
3. KES devaluation is now almost a certainty, the only question is when.
4. Political and civil upheaval is expected coz the only language treasury understands is increasing taxes. The other half of the 8% VAT will be imposed at the very latest in the 2019/20 budget.
5. Capital gains tax especially on real estate will be increased substantially.
I agree with your conclusion point 1 above based on the new law.
A). How do you come to the other 4 points in your conclusion based on the new law?
B) How does KES devaluation become a certainty in an environment of deflation?
C) conclusion point 4 is just wishful thinking in my view.... It will not happen in Kenya as we are so divided by tribe and we follow our tribal leaders.
A. Based on the level of desperation shown by Treasury to pass the new law...you get that nakumatt feeling. The market is pretty good at smelling desperation. The sharks will start gathering same way they did in Turkey and Argentina. We told IMF to f*** off with their insurance cover. B. @lochaz-index has previously posted that the interest rate cap operates like a currency peg. It's deflationary at at time when KE has piled up debt. It's also helping our current account by slowing down consumption of imports. It's almost like we are artificially propping KES. When the peg can't be defended because of reduced forex reserves then for KES. You might see KES beyond 120. C. In 2002 it was "yote yawezekana" so let's just watch the unfolding events. KE looks like an Argentina but without the bad rep of credit defaults. The main purpose of the stock market is to make fools of as many people as possible.
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Rank: Veteran Joined: 4/4/2016 Posts: 1,996 Location: Kitale
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VituVingiSana wrote:@lochaz-index - It's a pity that GoK will have to sell their stakes at a throw-away price BUT it needs to get out of the business of Business.
It should try to get rid of the bad apples like Mumias and Uchumi.
Vodafone (or large funds) may be in the market for Safaricom.
KenRe could find a strategic investor as long as GoK allows it to buy 51% it will be good for Gok to get out of business.There is no need to tax your own business while at the same time you expect to reap dividends.Safaricom will be taxed data and mpesa while Gok owns 25% of its shareholding. Towards the goal of financial freedom
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Rank: Elder Joined: 6/23/2009 Posts: 13,472 Location: nairobi
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Ebenyo wrote:VituVingiSana wrote:@lochaz-index - It's a pity that GoK will have to sell their stakes at a throw-away price BUT it needs to get out of the business of Business.
It should try to get rid of the bad apples like Mumias and Uchumi.
Vodafone (or large funds) may be in the market for Safaricom.
KenRe could find a strategic investor as long as GoK allows it to buy 51% it will be good for Gok to get out of business.There is no need to tax your own business while at the same time you expect to reap dividends.Safaricom will be taxed data and mpesa while Gok owns 25% of its shareholding. I don't see any issue here.. Double gains in terms of dividend cheque plus tax revenue. Telcos should actually be properly taxed in Kenya. Those gains are immoral. Its all fair from GoK point of view
HF 30,000 ABP 3.49; KQ 414,100 ABP 7.92; MTN 15,750 ABP 6.45
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Rank: Elder Joined: 12/4/2009 Posts: 10,636 Location: NAIROBI
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obiero wrote:Ebenyo wrote:VituVingiSana wrote:@lochaz-index - It's a pity that GoK will have to sell their stakes at a throw-away price BUT it needs to get out of the business of Business.
It should try to get rid of the bad apples like Mumias and Uchumi.
Vodafone (or large funds) may be in the market for Safaricom.
KenRe could find a strategic investor as long as GoK allows it to buy 51% it will be good for Gok to get out of business.There is no need to tax your own business while at the same time you expect to reap dividends.Safaricom will be taxed data and mpesa while Gok owns 25% of its shareholding. I don't see any issue here.. Double gains in terms of dividend cheque plus tax revenue. Telcos should actually be properly taxed in Kenya. Those gains are immoral. Its all fair from GoK point of view Airtel and Telkom kenya will be finished Wealth is built through a relatively simple equation
Wealth=Income + Investments - Lifestyle
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Rank: Veteran Joined: 11/14/2006 Posts: 1,311
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wukan wrote:Liv wrote:lochaz-index wrote:Just had a quick look at the finance bill (now law), the implications of the taxes will be devastating:
1. Money velocity is about to go to the dogs. Deflation in earnest really and it won't be kind to any asset class including the NSE.
2. Looks like KE won't be dodging a debt/fiscal crisis.
3. KES devaluation is now almost a certainty, the only question is when.
4. Political and civil upheaval is expected coz the only language treasury understands is increasing taxes. The other half of the 8% VAT will be imposed at the very latest in the 2019/20 budget.
5. Capital gains tax especially on real estate will be increased substantially.
I agree with your conclusion point 1 above based on the new law.
A). How do you come to the other 4 points in your conclusion based on the new law?
B) How does KES devaluation become a certainty in an environment of deflation?
C) conclusion point 4 is just wishful thinking in my view.... It will not happen in Kenya as we are so divided by tribe and we follow our tribal leaders.
A. Based on the level of desperation shown by Treasury to pass the new law...you get that nakumatt feeling. The market is pretty good at smelling desperation. The sharks will start gathering same way they did in Turkey and Argentina. We told IMF to f*** off with their insurance cover. B. @lochaz-index has previously posted that the interest rate cap operates like a currency peg. It's deflationary at at time when KE has piled up debt. It's also helping our current account by slowing down consumption of imports. It's almost like we are artificially propping KES. When the peg can't be defended because of reduced forex reserves then for KES. You might see KES beyond 120. C. In 2002 it was "yote yawezekana" so let's just watch the unfolding events.
A). Desperation? What desperation.... the government lowered vat on petrol products from 16 to 8%. They cut the budget by sh 55 billion. Where did you read desperation?... Can you explain what the sharks you are talking about will do to the economy or are likely to do?
B). The KES is not strong today because it's being defended using Forex reserves. It's strong because of the deflationary state of the economy. I asked....how will KES weaken in the current state of deflation? And at what point will the Peg you mentioned become indefensible?
C). I didn't get your point how the new law will eventually lead to political chaos in Kenya. Please elaborate.
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Rank: Veteran Joined: 11/14/2006 Posts: 1,311
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lochaz-index wrote:Liv wrote:lochaz-index wrote:Just had a quick look at the finance bill (now law), the implications of the taxes will be devastating:
1. Money velocity is about to go to the dogs. Deflation in earnest really and it won't be kind to any asset class including the NSE.
2. Looks like KE won't be dodging a debt/fiscal crisis.
3. KES devaluation is now almost a certainty, the only question is when.
4. Political and civil upheaval is expected coz the only language treasury understands is increasing taxes. The other half of the 8% VAT will be imposed at the very latest in the 2019/20 budget.
5. Capital gains tax especially on real estate will be increased substantially.
I agree with your conclusion point 1 above based on the new law.
A). How do you come to the other 4 points in your conclusion based on the new law?
B) How does KES devaluation become a certainty in an environment of deflation?
C) conclusion point 4 is just wishful thinking in my view.... It will not happen in Kenya as we are so divided by tribe and we follow our tribal leaders.
Note that the finance bill is only making a bad situation worse, it therefore must be viewed in context. As for your queries I will let reality do the talking...it is a hell of a lot more eloquent. That said, I've expressed my thinking in other threads and I will add that GoK may be forced to sell its stake in some assets (eg safcom) at throw away prices if push comes to shove. I thought your 5 points above were the implications of the new law as you had said.
I wanted to understand how this new law will eventually cause the "sky to finally fall".... since you've been warning against the same for the last 5 or so years.
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Rank: Elder Joined: 2/26/2012 Posts: 15,979
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Liv wrote:wukan wrote:Liv wrote:lochaz-index wrote:Just had a quick look at the finance bill (now law), the implications of the taxes will be devastating:
1. Money velocity is about to go to the dogs. Deflation in earnest really and it won't be kind to any asset class including the NSE.
2. Looks like KE won't be dodging a debt/fiscal crisis.
3. KES devaluation is now almost a certainty, the only question is when.
4. Political and civil upheaval is expected coz the only language treasury understands is increasing taxes. The other half of the 8% VAT will be imposed at the very latest in the 2019/20 budget.
5. Capital gains tax especially on real estate will be increased substantially.
I agree with your conclusion point 1 above based on the new law.
A). How do you come to the other 4 points in your conclusion based on the new law?
B) How does KES devaluation become a certainty in an environment of deflation?
C) conclusion point 4 is just wishful thinking in my view.... It will not happen in Kenya as we are so divided by tribe and we follow our tribal leaders.
A. Based on the level of desperation shown by Treasury to pass the new law...you get that nakumatt feeling. The market is pretty good at smelling desperation. The sharks will start gathering same way they did in Turkey and Argentina. We told IMF to f*** off with their insurance cover. B. @lochaz-index has previously posted that the interest rate cap operates like a currency peg. It's deflationary at at time when KE has piled up debt. It's also helping our current account by slowing down consumption of imports. It's almost like we are artificially propping KES. When the peg can't be defended because of reduced forex reserves then for KES. You might see KES beyond 120. C. In 2002 it was "yote yawezekana" so let's just watch the unfolding events.
A). Desperation? What desperation.... the government lowered vat on petrol products from 16 to 8%. They cut the budget by sh 55 billion. Where did you read desperation?... Can you explain what will the sharks you are talking about do to the economy or are likely to do? Added +8% from 0. My question is why was it 0 rated in the first place? I dont see Kenyans changing their driving, travelling habits because of this....they will lament and get used to it
B). The KES is not strong today because it's being defended using Forex reserves. It's strong because of the deflationary state of the economy. I asked....how will KES weaken in the current state of deflation? And at what point will the Peg you mentioned become indefensible?
C). I didn't get your point how the new law will eventually lead to political chaos in Kenya. Please elaborate. I concur....that will not happen. Monday comes and we go on with life as if nothing ever happened.
All in all......Uhuru should clean up treasury. There are fiscal management and debt issues that need to be tightened and that cannot happen without a shift in mentality. Njiraini needs to go. KRA is still a corruption den... "There are only two emotions in the market, hope & fear. The problem is you hope when you should fear & fear when you should hope: - Jesse Livermore
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Rank: Elder Joined: 12/7/2012 Posts: 11,901
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murchr wrote:Liv wrote:wukan wrote:Liv wrote:lochaz-index wrote:Just had a quick look at the finance bill (now law), the implications of the taxes will be devastating:
1. Money velocity is about to go to the dogs. Deflation in earnest really and it won't be kind to any asset class including the NSE.
2. Looks like KE won't be dodging a debt/fiscal crisis.
3. KES devaluation is now almost a certainty, the only question is when.
4. Political and civil upheaval is expected coz the only language treasury understands is increasing taxes. The other half of the 8% VAT will be imposed at the very latest in the 2019/20 budget.
5. Capital gains tax especially on real estate will be increased substantially.
I agree with your conclusion point 1 above based on the new law.
A). How do you come to the other 4 points in your conclusion based on the new law?
B) How does KES devaluation become a certainty in an environment of deflation?
C) conclusion point 4 is just wishful thinking in my view.... It will not happen in Kenya as we are so divided by tribe and we follow our tribal leaders.
A. Based on the level of desperation shown by Treasury to pass the new law...you get that nakumatt feeling. The market is pretty good at smelling desperation. The sharks will start gathering same way they did in Turkey and Argentina. We told IMF to f*** off with their insurance cover. B. @lochaz-index has previously posted that the interest rate cap operates like a currency peg. It's deflationary at at time when KE has piled up debt. It's also helping our current account by slowing down consumption of imports. It's almost like we are artificially propping KES. When the peg can't be defended because of reduced forex reserves then for KES. You might see KES beyond 120. C. In 2002 it was "yote yawezekana" so let's just watch the unfolding events.
A). Desperation? What desperation.... the government lowered vat on petrol products from 16 to 8%. They cut the budget by sh 55 billion. Where did you read desperation?... Can you explain what will the sharks you are talking about do to the economy or are likely to do? Added +8% from 0. My question is why was it 0 rated in the first place? I dont see Kenyans changing their driving, travelling habits because of this....they will lament and get used to it
B). The KES is not strong today because it's being defended using Forex reserves. It's strong because of the deflationary state of the economy. I asked....how will KES weaken in the current state of deflation? And at what point will the Peg you mentioned become indefensible?
C). I didn't get your point how the new law will eventually lead to political chaos in Kenya. Please elaborate. I concur....that will not happen. Monday comes and we go on with life as if nothing ever happened.
All in all......Uhuru should clean up treasury. There are fiscal management and debt issues that need to be tightened and that cannot happen without a shift in mentality. Njiraini needs to go. KRA is still a corruption den... @Liv the government didn't lower VAT on petrol from 16 to 8 but introduced VAT on petrol at 8%. 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: Veteran Joined: 9/18/2014 Posts: 1,127
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Liv wrote:lochaz-index wrote:Liv wrote:lochaz-index wrote:Just had a quick look at the finance bill (now law), the implications of the taxes will be devastating:
1. Money velocity is about to go to the dogs. Deflation in earnest really and it won't be kind to any asset class including the NSE.
2. Looks like KE won't be dodging a debt/fiscal crisis.
3. KES devaluation is now almost a certainty, the only question is when.
4. Political and civil upheaval is expected coz the only language treasury understands is increasing taxes. The other half of the 8% VAT will be imposed at the very latest in the 2019/20 budget.
5. Capital gains tax especially on real estate will be increased substantially.
I agree with your conclusion point 1 above based on the new law.
A). How do you come to the other 4 points in your conclusion based on the new law?
B) How does KES devaluation become a certainty in an environment of deflation?
C) conclusion point 4 is just wishful thinking in my view.... It will not happen in Kenya as we are so divided by tribe and we follow our tribal leaders.
Note that the finance bill is only making a bad situation worse, it therefore must be viewed in context. As for your queries I will let reality do the talking...it is a hell of a lot more eloquent. That said, I've expressed my thinking in other threads and I will add that GoK may be forced to sell its stake in some assets (eg safcom) at throw away prices if push comes to shove. I thought your 5 points above were the implications of the new law as you had said.
I wanted to understand how this new law will eventually cause the "sky to finally fall".... since you've been warning against the same for the last 5 or so years. My bad, I assumed the context of the developments was implied. The main purpose of the stock market is to make fools of as many people as possible.
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Rank: Veteran Joined: 11/14/2006 Posts: 1,311
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lochaz-index wrote:Liv wrote:lochaz-index wrote:Liv wrote:lochaz-index wrote:Just had a quick look at the finance bill (now law), the implications of the taxes will be devastating:
1. Money velocity is about to go to the dogs. Deflation in earnest really and it won't be kind to any asset class including the NSE.
2. Looks like KE won't be dodging a debt/fiscal crisis.
3. KES devaluation is now almost a certainty, the only question is when.
4. Political and civil upheaval is expected coz the only language treasury understands is increasing taxes. The other half of the 8% VAT will be imposed at the very latest in the 2019/20 budget.
5. Capital gains tax especially on real estate will be increased substantially.
I agree with your conclusion point 1 above based on the new law.
A). How do you come to the other 4 points in your conclusion based on the new law?
B) How does KES devaluation become a certainty in an environment of deflation?
C) conclusion point 4 is just wishful thinking in my view.... It will not happen in Kenya as we are so divided by tribe and we follow our tribal leaders.
Note that the finance bill is only making a bad situation worse, it therefore must be viewed in context. As for your queries I will let reality do the talking...it is a hell of a lot more eloquent. That said, I've expressed my thinking in other threads and I will add that GoK may be forced to sell its stake in some assets (eg safcom) at throw away prices if push comes to shove. I thought your 5 points above were the implications of the new law as you had said.
I wanted to understand how this new law will eventually cause the "sky to finally fall".... since you've been warning against the same for the last 5 or so years. My bad, I assumed the context of the developments was implied. Sir, I expected you to at least concede that this law in fact is a step in the right direction and it would if anything delay the debt catastrophe you've been foretelling about here.... the law reduces the budget and endeavours to raise more money through tax instead of more debt financing.
When you say that the law makes things worse, what would have been the better option according to you?
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Rank: Veteran Joined: 11/14/2006 Posts: 1,311
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Angelica _ann wrote:murchr wrote:Liv wrote:wukan wrote:Liv wrote:lochaz-index wrote:Just had a quick look at the finance bill (now law), the implications of the taxes will be devastating:
1. Money velocity is about to go to the dogs. Deflation in earnest really and it won't be kind to any asset class including the NSE.
2. Looks like KE won't be dodging a debt/fiscal crisis.
3. KES devaluation is now almost a certainty, the only question is when.
4. Political and civil upheaval is expected coz the only language treasury understands is increasing taxes. The other half of the 8% VAT will be imposed at the very latest in the 2019/20 budget.
5. Capital gains tax especially on real estate will be increased substantially.
I agree with your conclusion point 1 above based on the new law.
A). How do you come to the other 4 points in your conclusion based on the new law?
B) How does KES devaluation become a certainty in an environment of deflation?
C) conclusion point 4 is just wishful thinking in my view.... It will not happen in Kenya as we are so divided by tribe and we follow our tribal leaders.
A. Based on the level of desperation shown by Treasury to pass the new law...you get that nakumatt feeling. The market is pretty good at smelling desperation. The sharks will start gathering same way they did in Turkey and Argentina. We told IMF to f*** off with their insurance cover. B. @lochaz-index has previously posted that the interest rate cap operates like a currency peg. It's deflationary at at time when KE has piled up debt. It's also helping our current account by slowing down consumption of imports. It's almost like we are artificially propping KES. When the peg can't be defended because of reduced forex reserves then for KES. You might see KES beyond 120. C. In 2002 it was "yote yawezekana" so let's just watch the unfolding events.
A). Desperation? What desperation.... the government lowered vat on petrol products from 16 to 8%. They cut the budget by sh 55 billion. Where did you read desperation?... Can you explain what will the sharks you are talking about do to the economy or are likely to do? Added +8% from 0. My question is why was it 0 rated in the first place? I dont see Kenyans changing their driving, travelling habits because of this....they will lament and get used to it
B). The KES is not strong today because it's being defended using Forex reserves. It's strong because of the deflationary state of the economy. I asked....how will KES weaken in the current state of deflation? And at what point will the Peg you mentioned become indefensible?
C). I didn't get your point how the new law will eventually lead to political chaos in Kenya. Please elaborate. I concur....that will not happen. Monday comes and we go on with life as if nothing ever happened.
All in all......Uhuru should clean up treasury. There are fiscal management and debt issues that need to be tightened and that cannot happen without a shift in mentality. Njiraini needs to go. KRA is still a corruption den... @Liv the government didn't lower VAT on petrol from 16 to 8 but introduced VAT on petrol at 8%.
You are right sweetheart.... but does that sound like the government acted desperately as someone would want us to believe here?
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Rank: Elder Joined: 6/23/2009 Posts: 13,472 Location: nairobi
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Liv wrote:Angelica _ann wrote:murchr wrote:Liv wrote:wukan wrote:Liv wrote:lochaz-index wrote:Just had a quick look at the finance bill (now law), the implications of the taxes will be devastating:
1. Money velocity is about to go to the dogs. Deflation in earnest really and it won't be kind to any asset class including the NSE.
2. Looks like KE won't be dodging a debt/fiscal crisis.
3. KES devaluation is now almost a certainty, the only question is when.
4. Political and civil upheaval is expected coz the only language treasury understands is increasing taxes. The other half of the 8% VAT will be imposed at the very latest in the 2019/20 budget.
5. Capital gains tax especially on real estate will be increased substantially.
I agree with your conclusion point 1 above based on the new law.
A). How do you come to the other 4 points in your conclusion based on the new law?
B) How does KES devaluation become a certainty in an environment of deflation?
C) conclusion point 4 is just wishful thinking in my view.... It will not happen in Kenya as we are so divided by tribe and we follow our tribal leaders.
A. Based on the level of desperation shown by Treasury to pass the new law...you get that nakumatt feeling. The market is pretty good at smelling desperation. The sharks will start gathering same way they did in Turkey and Argentina. We told IMF to f*** off with their insurance cover. B. @lochaz-index has previously posted that the interest rate cap operates like a currency peg. It's deflationary at at time when KE has piled up debt. It's also helping our current account by slowing down consumption of imports. It's almost like we are artificially propping KES. When the peg can't be defended because of reduced forex reserves then for KES. You might see KES beyond 120. C. In 2002 it was "yote yawezekana" so let's just watch the unfolding events.
A). Desperation? What desperation.... the government lowered vat on petrol products from 16 to 8%. They cut the budget by sh 55 billion. Where did you read desperation?... Can you explain what will the sharks you are talking about do to the economy or are likely to do? Added +8% from 0. My question is why was it 0 rated in the first place? I dont see Kenyans changing their driving, travelling habits because of this....they will lament and get used to it
B). The KES is not strong today because it's being defended using Forex reserves. It's strong because of the deflationary state of the economy. I asked....how will KES weaken in the current state of deflation? And at what point will the Peg you mentioned become indefensible?
C). I didn't get your point how the new law will eventually lead to political chaos in Kenya. Please elaborate. I concur....that will not happen. Monday comes and we go on with life as if nothing ever happened.
All in all......Uhuru should clean up treasury. There are fiscal management and debt issues that need to be tightened and that cannot happen without a shift in mentality. Njiraini needs to go. KRA is still a corruption den... @Liv the government didn't lower VAT on petrol from 16 to 8 but introduced VAT on petrol at 8%.
You are right sweetheart.... but does that sound like the government acted desperately as someone would want us to believe here? Angelica could be a man na unamuita sweetie..
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: 11/13/2015 Posts: 1,568
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Liv wrote:
A). Desperation? What desperation.... the government lowered vat on petrol products from 16 to 8%. They cut the budget by sh 55 billion. Where did you read desperation?... Can you explain what the sharks you are talking about will do to the economy or are likely to do?
B). The KES is not strong today because it's being defended using Forex reserves. It's strong because of the deflationary state of the economy. I asked....how will KES weaken in the current state of deflation? And at what point will the Peg you mentioned become indefensible?
C). I didn't get your point how the new law will eventually lead to political chaos in Kenya. Please elaborate.
A. You do realize by increasing taxes and cutting spending at the same time the GoK is actually withdrawing money from the economy at a time when banks are not lending  . Which is why we are saying from the charts above NSE will be sub 2K-deflation. They are good examples of what sharks do in such situations e.g. Argentina and now Zambia. B. If KE assets are in deflation don't you think they are better places to put the capital to use. Capital flight can weaken the KES. I don't work with Treasury or the MPs so I don't know how long the rate cap will remain.
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Rank: Elder Joined: 12/4/2009 Posts: 10,636 Location: NAIROBI
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Liv wrote:Angelica _ann wrote:murchr wrote:Liv wrote:wukan wrote:Liv wrote:lochaz-index wrote:Just had a quick look at the finance bill (now law), the implications of the taxes will be devastating:
1. Money velocity is about to go to the dogs. Deflation in earnest really and it won't be kind to any asset class including the NSE.
2. Looks like KE won't be dodging a debt/fiscal crisis.
3. KES devaluation is now almost a certainty, the only question is when.
4. Political and civil upheaval is expected coz the only language treasury understands is increasing taxes. The other half of the 8% VAT will be imposed at the very latest in the 2019/20 budget.
5. Capital gains tax especially on real estate will be increased substantially.
I agree with your conclusion point 1 above based on the new law.
A). How do you come to the other 4 points in your conclusion based on the new law?
B) How does KES devaluation become a certainty in an environment of deflation?
C) conclusion point 4 is just wishful thinking in my view.... It will not happen in Kenya as we are so divided by tribe and we follow our tribal leaders.
A. Based on the level of desperation shown by Treasury to pass the new law...you get that nakumatt feeling. The market is pretty good at smelling desperation. The sharks will start gathering same way they did in Turkey and Argentina. We told IMF to f*** off with their insurance cover. B. @lochaz-index has previously posted that the interest rate cap operates like a currency peg. It's deflationary at at time when KE has piled up debt. It's also helping our current account by slowing down consumption of imports. It's almost like we are artificially propping KES. When the peg can't be defended because of reduced forex reserves then for KES. You might see KES beyond 120. C. In 2002 it was "yote yawezekana" so let's just watch the unfolding events.
A). Desperation? What desperation.... the government lowered vat on petrol products from 16 to 8%. They cut the budget by sh 55 billion. Where did you read desperation?... Can you explain what will the sharks you are talking about do to the economy or are likely to do? Added +8% from 0. My question is why was it 0 rated in the first place? I dont see Kenyans changing their driving, travelling habits because of this....they will lament and get used to it
B). The KES is not strong today because it's being defended using Forex reserves. It's strong because of the deflationary state of the economy. I asked....how will KES weaken in the current state of deflation? And at what point will the Peg you mentioned become indefensible?
C). I didn't get your point how the new law will eventually lead to political chaos in Kenya. Please elaborate. I concur....that will not happen. Monday comes and we go on with life as if nothing ever happened.
All in all......Uhuru should clean up treasury. There are fiscal management and debt issues that need to be tightened and that cannot happen without a shift in mentality. Njiraini needs to go. KRA is still a corruption den... @Liv the government didn't lower VAT on petrol from 16 to 8 but introduced VAT on petrol at 8%.
You are right sweetheart.... but does that sound like the government acted desperately as someone would want us to believe here? The desperation was in the manner finance bill had to pass.VAT was lowered to 8% but additional tax measures introduced like excise duty on Internet and voice. Excise duty on mobile money raised from the proposed 12% to 15 Excise duty on financial transactions from proposed 12% to 20% Wealth is built through a relatively simple equation
Wealth=Income + Investments - Lifestyle
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Rank: Elder Joined: 9/20/2015 Posts: 2,811 Location: Mombasa
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obiero wrote:Liv wrote:Angelica _ann wrote:murchr wrote:Liv wrote:wukan wrote:Liv wrote:lochaz-index wrote:Just had a quick look at the finance bill (now law), the implications of the taxes will be devastating:
1. Money velocity is about to go to the dogs. Deflation in earnest really and it won't be kind to any asset class including the NSE.
2. Looks like KE won't be dodging a debt/fiscal crisis.
3. KES devaluation is now almost a certainty, the only question is when.
4. Political and civil upheaval is expected coz the only language treasury understands is increasing taxes. The other half of the 8% VAT will be imposed at the very latest in the 2019/20 budget.
5. Capital gains tax especially on real estate will be increased substantially.
I agree with your conclusion point 1 above based on the new law.
A). How do you come to the other 4 points in your conclusion based on the new law?
B) How does KES devaluation become a certainty in an environment of deflation?
C) conclusion point 4 is just wishful thinking in my view.... It will not happen in Kenya as we are so divided by tribe and we follow our tribal leaders.
A. Based on the level of desperation shown by Treasury to pass the new law...you get that nakumatt feeling. The market is pretty good at smelling desperation. The sharks will start gathering same way they did in Turkey and Argentina. We told IMF to f*** off with their insurance cover. B. @lochaz-index has previously posted that the interest rate cap operates like a currency peg. It's deflationary at at time when KE has piled up debt. It's also helping our current account by slowing down consumption of imports. It's almost like we are artificially propping KES. When the peg can't be defended because of reduced forex reserves then for KES. You might see KES beyond 120. C. In 2002 it was "yote yawezekana" so let's just watch the unfolding events.
A). Desperation? What desperation.... the government lowered vat on petrol products from 16 to 8%. They cut the budget by sh 55 billion. Where did you read desperation?... Can you explain what will the sharks you are talking about do to the economy or are likely to do? Added +8% from 0. My question is why was it 0 rated in the first place? I dont see Kenyans changing their driving, travelling habits because of this....they will lament and get used to it
B). The KES is not strong today because it's being defended using Forex reserves. It's strong because of the deflationary state of the economy. I asked....how will KES weaken in the current state of deflation? And at what point will the Peg you mentioned become indefensible?
C). I didn't get your point how the new law will eventually lead to political chaos in Kenya. Please elaborate. I concur....that will not happen. Monday comes and we go on with life as if nothing ever happened.
All in all......Uhuru should clean up treasury. There are fiscal management and debt issues that need to be tightened and that cannot happen without a shift in mentality. Njiraini needs to go. KRA is still a corruption den... @Liv the government didn't lower VAT on petrol from 16 to 8 but introduced VAT on petrol at 8%.
You are right sweetheart.... but does that sound like the government acted desperately as someone would want us to believe here? Angelica could be a man na unamuita sweetie.. You're a nosy meddler. You could be interfering with other people's lifestyles...  John 5:17 But Jesus replied, “My Father is always working, and so am I.”
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