Friday, July 08, 2005

NSE mania



The current rise of stocks at the Nairobi Stock Exchange is spreading like a fever and everyone seems to be catching the bug. I got a bit worried when five ladies in the office filled out CDS forms (to start trading in stocks) - all intending to buy Kenya Airways stock. I guess they got tired of one person in the office who, against my advice, bought KQ at a then high of 48 shillings per share about a month ago, and has been bragging to all, but especially to me, now that it has passed the 75 shilling mark.

I’d be surprised if Kenya Airways and Titus Naikuni don’t win Company and Executive of the Year awards at tonight’s COYA Awards.

15 comments:

Anonymous said...

Well, U are going to have to listen to your officemate for a while longer coz it is at 82/- & could go even higher!

Anonymous said...

At 82/- the PE is less than 10 while most other counters e.g. EABL, BBK, ARM are way above 10!

So KQ might have some ways to go...

bankelele said...

What is scary is a lot of these new investors don't know or care about PE ratios, dividends, history, trends or management of these companies. All they want is to buy at 82 and sell at 130. If it goes does to 60, they will bail out of the market entirely.

universally speaking said...

Forgive my ignorance, but what might be pushing up the stock that fast, and for how long will it keep running upwards? Plus, are these momentum investors aware of these factors that are causing the price surge, or are they just riding the wave for the hope of making a killing when the price peaks at God-knows-when?

Kuoasan said...

@Bankelele

WEll, that is the nature of the beast & some will be burnt. When & f the price falls, we should be ready to buy! IMHO, KQ is well run with a strong management team & support from KLM. Even KLM must be astounded by KQ's success that they are trying to edge into KQ's Uganda market!

It's a learning process for the new investors!

@low fidelity

Yes, there are momentum factors as well as intro of CDS makes it easier to sell. Thus more speculation/flipping.

Deno said...

can u say BUBBLE?

The entry of the CDS and new easier ways to trade are all but fanning the flames.

I like u bKele, are wary of those who will quickly jump on the bandwagon, but will be just as quick to jump off when first big bump scares them..

Deno said...
This comment has been removed by a blog administrator.
bankelele said...

Safaricom and Michael Joseph did it again - winning Company and Executive of the Year, but am not sure if Kenya Airways entered the competition: http://www.eastandard.net/hm_news/news.php?articleid=24864

Ms K said...

One day very soon Bankelele I'm going to demand you meet me for coffee and explain all this PE, etc mambojambo. Sawaz?

bankelele said...

Ms K

I don't have all the answers, but will do my best to explain.

Shiroh said...

Ms K P/E ratio means price earning ratio. You have to gauge what is the earning per share of each shareholder.
@Bankelele, the last time i visited my stock broker to be was in January and at that time and if i had done what he had told me, i could be enjoying the best stock boom there was ever to be but market sense in Kenya is very simple.
There is nothing to really scheme about, at the beginning of the year the prices are low due to christmas festivities and the fact that dividends have been declared and the dust settled down. This goes on upto April again when the quarter profits and final dividend is declared and the market upsurges again.
I have been a market watcher for quite a while now, and i have realized just a slight change in management can affect the prices of shares. I was just wondering aloud, what if Naikuni resigned now?
Let your people enjoy trading the KQ shares for now.

Anonymous said...

Does the new CDS system make it possible for individual to trade electronically without the floor brokers

Anonymous said...

Unfortunately no... thus the poor service and high prices...

CDS is simply for "storage"

Try Francis Drummond they are above the rest...

www.francisdrummond.com

High commissions also due to excessive fees levied by CMA & NSE

bankelele said...

2% per deal, is the fixed commision for an NSE trade. It is not an excessive fee

Anonymous said...

is it right for the broker to split your shares so much so tha they can earn more commission.and which is the best broker in town which will advise new traders like me. am fed up with ma stock broker.

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