Markets:
· NSE will touch a high of 4,200 (the highest until 2012) with KQ, Mumias, Equity, Centum, Stan Chart, Safcom all seeing new highs.
· Gold will touch a high of 1,250 before falling off as inflation fears recede due to rises in interest rates in the 2nd half of the year
· Oil will stay around $80 all year
· Shilling will not go below K120 to the pound but will be much more volatile against the dollar
Economics:
· Kenya’s economy will record 4.1% growth in 2010 driven by agriculture, construction, tourism and “actual” reduction in inflation
· Spain, Greece among others will see credit rating downgrades. UK will only avoid one if Tories/Labour have a clear majority in the May elections
Politics:
· The two mbutas that most of us want to see at the Hague, Ruto and UK won’t be going there
· In keeping with our love of tribalism as a political ideology, various of our elected wabunge will continue alliance building ensuring no repeat of 2008 PEV in 2012
· Tories will win but with a sliver thin majority
Environment
· Mau won’t happen. That is, no mbuta will be evicted without the serious compensation already mooted
7 comments:
While I'm not debating the NSE numbers, that can be achieved even during a bear market rally, for this to happen, all the government/CBK needs to do is keep printing cash.
On the matter of the economy, its hard to see agriculture growing with resources moving from agriculture to real estate in search of higher yields.
Gold may fall but it will rebound when the dollar, and other fiat currencies, start its slide to oblivion. The UK is likely to see a ratings downgrade as they kill one of their most productive industries through taxation and vilification.
Oil can rise above USD80/bbl when nations decide to use other units of account other than the dollar.
On the NSE numbers, I think the NSE is just too fragile. With the politics of the referendum things might remain uncertain hence depressed numbers. But on thinking again the NSE numbers always seem to rise and plateau just before significant political events eg. 2002 election, 2005 referendum and 2007 election.
Am bullish this year...
:-)
Juveson-I think the NSE and economy numbers will bear me out. Agriculture is still the mainstay for 65% of Kenya's population-assuming the rains continue into Feb and we have shorter rains in August, food pries will come down. A huge boon for spending in Kenya.
Gold doesn't quite have the strong legs it had last yr when everybody was thinking conventional economics i.e. low interest rates leading to high inflation. The situation in the US/UK economies is more likely to mirror Japan's situation sine early 90s.
Maina T- I like your optimism but from the experience of UK, I have come to see governments don't grow economies, they can at best facilitate. What I've seen in Kenya, they hinder business... the credit expansion combined with the loose monetary policy and the fiscal policy on steroids looks good now but it may not a few months down the line when inflation is unbearable and taxes are driving businesses out of operations... and the government's finances are rapidly deteriorating.
As for Japan... the reason why inflation never kicked in despite their ultra loose policies is because of carry trades... now that interest rates the world over are loose, who's gonna borrow from abroad? As you can see, commodities are already on the rise... and that includes oil. Next up... inflation and the high taxes are sure to lead to Stagflation
Juveson-I think you are the opposite of me, too pessimistic. I hope you don't trade at the NSE where you can't make any coins in short-selling.
H/ever, I think govts in the west will hesitate to increase taxes or rates until the last moment. What they'll instead do is cut spending on all but the politically sensitive pieces of spending like health.
Gmeltdown-u see politicians have already wrapped some kinda of deal to keep themselves in the game...Therefore creating some immunity for 2012
I'm very pessimistic but even I wouldn't short the government. That's a sure loss. The best strategy in the short run is to stick with the trend... after all, the trend is your friend or so we are told.
About governments in the west... Germany's right government will cut taxes because that's their philosophy plus 1923 is still remembered like it was yesterday. Greece, Spain, Ireland and Portugal may not have a choice. That's the logical thing to do. The Americans and the British are too arrogant to do it. Granted Super O has ordered a freeze on spending but that's lip service in my opinion. Both US and UK are going to go the Japanese way, try to spend your way out of a recession. This can only be achieved using the most insidious tax of them all... Loose monetary policy! So if politicians are faced with the option of a depression today or uncertainty in the future... guess what they'll choose. If you don't have a republican(right) government in place... you can consider your savings F*cked. But right now? ride the wave...
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