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Making Sense of the Monetary Policy - September 2011

The Monetary Policy Committee (MPC) held a special meeting on 14th September 2011. The meeting had become necessary as the previous actions of the MPC this year had been largely ineffective, and the Central Bank of Kenya (CBK) had been forced to take a number of measures between the MPC meetings in order to stabilize markets.

2:54 pm Saturday October 01, 2011 – Cannon Asset Managers (Cannon Asset Managers)

Equity Markets - August 2011 Newsletter

The market was impacted by the uncertainty in global markets - the debt crisis in Greece and other European countries, the stand-off in the US regarding the debt ceiling and the downgrade of US Government debt by Standard & Poor. The NSE All Share Index fell to 76.14 on 25th August 2011, down 22.16% points from the beginning of the year and down 9.70% points from the beginning of the month.

4:46 pm Friday September 02, 2011 – Cannon Asset Managers (Cannon Asset Managers)

Interest Rates - August 2011 Newsletter

In our July newsletter, we had given our opinion that the Monetary Policy Committee of the CBK should have increased the Central Bank Rate (CBR) in its July meeting, and that the appropriate rate was at least 8%, instead of leaving the rate unchanged at 6.25%. On 12th August, the Central Bank once again reverted to a tight monetary policy stance, just 2 weeks after indicating that they did not believe tight policy stance would have the desired result.

4:46 pm Friday September 02, 2011 – Cannon Asset Managers (Cannon Asset Managers)

Interest Rates - Volatile Monetary Policy!

The Monetary Policy adopted by the Central Bank of Kenya (CBK) since January has been sending conflicting and contradictory signals. At the Monetary Policy Committee (MPC) meeting held on 27th July, the Central Bank Rate (CBR) was left unchanged at a level of 6.25%, much against market expectations of an increase of 0.25% to 0.50%. We have tabulated below the observations and the policy actions taken on the monetary policy front since January 2011.

5:37 pm Tuesday August 02, 2011 – Cannon Asset Managers (Cannon Asset Managers)

Weekly Round-Up - Week of August 1, 2011

Inflation has increased for the ninth straight month in July, bringing renewed pressure on the Central bank to tighten its monetary policy. Inflation may slow to between 8 percent and 9 percent by the end of the year if the central bank raises rates, while failure to tighten monetary policy may keep the inflation rate above 12 percent.

1:04 pm Monday August 01, 2011 – Michael Musau

Kenya Treasury Yield Curve and Bond Valuations

In our previous newsletters, we have highlighted that the prices and yields of secondary market trades reported at the Nairobi Stock Exchange (NSE) are at artificial prices, and not reflective of the market, as a majority trades are taking place at grossly inflated prices.

11:55 am Thursday July 07, 2011 – Cannon Asset Managers (Cannon Asset Managers)

Review of Previous Recommendations - June 2011

In March and April we had given our stock picks I&M Bank (unlisted), Kenol Kobil (KENO) and Total Kenya (TOTL) - we revisit these stock picks in this newsletter.

2:27 pm Saturday June 25, 2011 – Cannon Asset Managers (Cannon Asset Managers)

Kenya Market Outlook - June 2011

The Central Bank follows an accommodative monetary policy stance with the aim of stimulating economic activity. The monetary policy is successful in pushing market interest rates to record lows, as well as leading to a spurt in bank lending, and an increase in GDP growth. The low interest rates lead to a rush by investors to subscribe to long-term Treasury bonds in preference to Treasury bills, leading to a lengthening of the average maturity of Government debt.

1:57 pm Saturday June 25, 2011 – Cannon Asset Managers (Cannon Asset Managers)

Safaricom Limited - June 2011 Stock Pick

Safaricom's results for the year ended in March 2011 covered the most traumatic period in the company's history. The company faced challenges from the regulatory regime, which were seen to be tilting the playing field in favour of competition. On the competitive front, the year saw the entry of the Indian telecommunication group Airtel

10:35 am Saturday June 25, 2011 – Cannon Asset Managers (Cannon Asset Managers)

Kenya Market Outlook - April 2011

The yield on the 91-day Treasury Bill continued its upward trajectory, reaching a rate of 3.52% at the latest auction. The rise has been somewhat muted as a number of banks have opted to invest in 91-day Treasury bills and give other maturities a miss, until the market is seen to have stabilized. This has resulted in a sharper increase at the longer end of the yield curves.

3:22 pm Tuesday May 03, 2011 – Cannon Asset Managers (Cannon Asset Managers)

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