NSE searched and found new lows this week. It fell below the global-driven October lows and one has to go back to Dec 2004 to see us this low. These were the key movers in the week:
BAT Ksh138 up 1.5%- I think this is dividend chasers (its DPS is the highest)
Kakuzi Ksh22.25 up 1.1%
Rea Vipingo Ksh9.95 down 23.5% investors punishing the share for the fallen DPS and flat results.
KQ Ksh23 down 17.1% cack-handled profit warning. However, in the context of the global aviation industry, KQ is a star
The Merali stable of Sasini and Sameer
Mumias down 15% to close at Ksh4.25.
· We’ve been here before i.e. when the market defied global orthodoxy in early 2007. Then as now, the market movement was due to Kenya specific issues.
· The NSE as with other markets is driven by key themes. In Dec 2002, Kenyans were the happiest and most optimistic peeps in the world. We were free (or so we thought) of the m-o-1 tyranny. 2003-6 saw a bullish NSE- these were years of economic recovery; focus went from search for political to economic freedom; the global economic environment was benign and investors moved from emerging to frontier stockmarkets. 2007 saw Kenyans take a pause and ominously re-focus on politics. 2008 things went paragacha and the NSE pause became something else.
· In 2009, I believe we’re suffering from possibly the most dysfunctional government in the continent (with apologies to the Somalis). 42 cabinet ministers with two heads. One head is barely there (Google stroke symptoms) and other who having seen the prize will not offend anybody that would prevent him from getting his hands on the prize. Ordinarily, 42 ministers would not function. Yani, think a 42 member executive board. And then you’ve a selection of vultures from the m-o-1 era mixed with present ones. The irony of it all was seeing m-0-1 at that silly forum this week. Its utterly ridiculous and IMHO, our economy won’t grow as long as we have such governance. In such circumstances, this first half could see new lows.
· Finally, the volumes are low, so don’t discount short-selling with an eye on temporally speculative gains in the coming weeks.
Late Addition: Is Centum going to write-off its Ksh200m+ investment in RVR?
Is down 12.75% on ytd, but still one of the markets I follow religiously. Think copper, think China.
We'll see a u-curve, but there is some very good current pickings and after taking a bath on RBS (40% down), Barclays is doing good things so far-30% up so far. Btw, I think somebody caught wind of the rating downgrade because no one seemed to blink when it was announced earlier in the week.