NSE20 closed the month @3827 while the monthly open was 4022. May was a down month (-4.85%) coming after some big banks announced Q1 2016 results and mpesa bank's FY with bears still rejecting any bullish advance above the 4000 handle, which has been a barrier since Nov 2015 - 6 months and counting!

This month Treasury presents the national budget, which is sizable and will definitely give the taxman a collection headache. Globally two events are closely being followed - Fed rate hike (FOMC meeting on June 15) and BREXIT (results on June 24). Another Fed rate hike will continue strengthening the USD, which will sustain the capital outflow pressure in emerging markets. While BREXIT (walkout vote) will shake market, but I do expect EU to force the vote the other side for they stand to lose a lot if BREXIT is triggered!

Sitting on cash while waiting for fatter discounts continues to be my strategy.

The sooner NSE20 resolves the sideways action (3700 - 4000 range) up or down the better so that we can get moving.

We are many in cash ........ we need a down ward move of about 7.5-12.5% to present discounts on some of the firms with sound fundees for me are Bamburi, I&M, Safcom and DTB!!!

There must be a fierce battle. Discounts are offered now! Who knows, a rebound may start this month!

I saw a preview of blood today

Co-op breaking a multi year support and almost breaking below 15 (15.50 was tested quite easily)

No demand for KCB even at 37..35 looks an easy target

KPLC caving..

ETC

What surprises me is the resiliency of EABL,SAF and Bamburi..The real bell weathers!!!

Saf has defended 17 with all strength but am watching it for the next two weeks!!

Finally. We may yet have a market after a seven month snooze fest. That February low needs to give way to the bear.

If tbills/bonds rates are bottoming out investors had better hold on tight coz this could be bloodbath. Eurobond talk has died down and the whole thing could have fallen through. (Of all African states looking to float a Eurobond this year I think only South Africa managed to pull it off...reason being the premium rates demanded by the market discouraged the rest.) Local borrowing becomes the only option for our cash strapped government and its expansionary budget.

Add to this an expensive debt basket courtesy of loans sourced from China and our debt to GDP ratio will balloon very fast. The implication here is we can as well forget borrowing from the international markets both in the short and medium term since the rates will be unreasonably prohibitive.

USDKES, this will be a rout, fed hike or not. Capital flows head for the exit and a dollar shortage comes knocking.

On matters to do with local banks...I have seen even the so-called lean, mean and conservative banks are choking under the weight of NPLs but the pain is yet to hit home vs their bottomlines.


That said, we need a proper reset of the KE economy and a squeaky clean washout. I consider GFC to have been the appetizer/warm up for what will eventually be the main course(present time) and frankly, we should be cheering coz the discounts may be way bigger than any of us ever imagined. Likewise, the ensuing bull run will be gargantuan.

Saf has combined efforts with kcb, equitel, nmg, centyangu, in smashing record time lows, see how synchronous they are becoming. Mammoth downward match it is. Seeing safcom flirt with sub 17s, kcb inevitably and no guessing sub 37 will now be, is no a laughing matter to just fence sit. That's the warning wave of an impending ground shake.

@lochaz - A 100 bps reduction is peanuts. The lending rates are still in 18-24% for most loans. When GoK issued 30bn in TAX-FREE bonds in May 2016, why would a bank lend to (most) customers at anything less than 20% APR?

but if you insist... I'll drink your kool aid.

@Spikes - Where are you based?