Wednesday, October 22, 2008

Wednesday Shorts

An on-going discussion on the DSL/NSSF scandal has made me recall Shah Munge. Upto the Euro Bank scandal, Shah Munge was a very strong broker and pretty much on par with D&B at the time. It was then caught when it pushed NSSF to invest Ksh256m through it, which then disappeared with the collapse of Euro Bank. And that was that for Shah Munge. DSL in effect did the same thing with NSSF (yes there still no confirmation as to the lose incurred), but on a much larger scale. Does that mean that CMA/NSE regulatory regime is worse than 4 years ago?

Who gives Kibaki/RAO the authority to forgive their henchmen for crimes they didn't commit against the two?

The credit crunch impacting the banking system seems to have been largely been slowed down with sovereigns becoming the counterparties (the 3m LIBOR is down though not that significantly). However, global stock markets will continue to take punches because there are as yet no plans to slowdown the erosion of home equity as house prices fall in US/UK in particular. One of the more innovative ways would be to lengthen the period before repossessing or auctioning homes. Another, now being discussed in the UK is for gova to encourage councils to buy up more homes and utilise them for welfare housing. Either way, capitalism now needs a helping hand from govts otherwise the recession will be deep and long.

Mark Mobius' enthuasism for emerging markets is still going strong despite decoupling now being seen as another failed theoritical model. What he doesn't mention is that risk managment is now the number priority for many banks in the West (and one of the few areas that is doing new hires rather than replacement hires). Add to this, these institutions are ordinarily supposed to take a bigger capital hit for all non-OECD business. Draw your own conclusions. For sure emerging markets remains more attractive and funds will be poured in. Not this side of Xmas though.


bankelele said...

Years ago as a summer bunny i talked to Mr. Munge about an internship there - how different would my life be today, if I took up that chance?
- Mobius should be in Nairo next month for a talk, should be interesting. He was Mr. Emerging Markets long before they were the in-thing

MainaT said...

Bankelele, assuming this was 10yrs ago, you'd be so rich, you'd be an MP.

Mobius may be onto something. Most are down more than US/UK/Europe ones so it might be time to go in.