Analyst Stellar Swakei @StellarSwakei Twitter profile

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Analyst Stellar Swakei

8 months

"I sit on a man's back, chocking him and making him carry me, and yet assure myself and others that I am sorry for him and wish to lighten his load by all means - except by getting off his back" ~ Leo Tolstoy

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Analyst Stellar Swakei

@StellarSwakei

18 days

Again, I am struggling to understand the level of yearly maintenance costs for statehouse. It just doesn't make sense. See how the allocation jumped when KK took power? But we have to borrow to maintain such. So absurd!

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Analyst Stellar Swakei

@StellarSwakei

17 days

Incase you were wondering why the Finance Bill has become so popular under the KK regime, have a look at this We were not prepared for it. They threw us right into the fire but it was too hot. Ask the CS treasury😅: Former Cs

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Analyst Stellar Swakei

@StellarSwakei

15 days

The major fault I find with IMF is caring less about how money is spent, but caring too much how money will come in. Too much pressure to raise revenues but zero effort in ensuring accountability, yet this was also part of the deal. IMF is not our friend, but we know who to blame

Mwango Capital

@MwangoCapital

16 days

Prof. @dannybradlow : "...the IMF must create an independent accountability mechanism such as an external ombudsman who can receive complaints. Currently, the IMF is the only multilateral financial institution without such a mechanism"

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Analyst Stellar Swakei

@StellarSwakei

21 days

@ehdande @OkiyaOmtatah No bodyguards, no convoy, no guzzler. Just a man vouching for change. I hope and pray it stays that way

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Analyst Stellar Swakei

@StellarSwakei

13 days

Despite IMF's loans being a very small fraction of Kenya's total debt, they seemingly have substantial control over our country Again, it's important that we see the terms attached to the loans that we receive - 400bn out of a 10tn debt profile shouldn't warrant such control

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Analyst Stellar Swakei

@StellarSwakei

6 months

Data has an effective way of distinguishing politics and governance. How has GoK lowered the cost of living and provided good grounds for businesses when the cost of power has gone up by more than 50% since KK took power? This is basically crippling the economy

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Analyst Stellar Swakei

@StellarSwakei

2 months

As a matter of interest,I struggle to understand why the MVT falls under income tax yet the charge is based on the value of an asset that is not an income. The tax is clearly a wealth tax. Issue is, the constitution of Kenya does not provide for the imposition of a wealth tax.

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Analyst Stellar Swakei

@StellarSwakei

14 days

The Road Maintenance Levy public participation report should be made public. We want to compare what Kenyans wanted/said vs what the government did. Otherwise, it was just formality. Taxes & levies on petrol are almost catching up with the price of the product😬

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Analyst Stellar Swakei

@StellarSwakei

2 months

@AmbokoJH @KuriaKimaniMP Why did they settle on 2.5% and a cap? Let them remove the cap and reduce the rate to 1.5% or 1%. That way, those with high value cars will compensate what the govt envisions to collect from the tax.

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Analyst Stellar Swakei

@StellarSwakei

14 days

On Kenya's credit rating, it has been going down hill since 2016. Well in tandem with our public debt. The more we borrow, the poorer it gets

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Analyst Stellar Swakei

@StellarSwakei

10 months

If an investor took a sum of KES 700,000 at the beginning of 2021 and invested in any of the below assets, this would be the portfolio position as at the end of September 2023. Mansa X is the best performing. Read more here:

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Analyst Stellar Swakei

@StellarSwakei

12 days

As we continue borrowing, let's remember that these are some of the things that inflate our budget. We are in the same country, but our representatives earn 10 times more than the common mwananchi. And they end up not representing us at all!

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Analyst Stellar Swakei

@StellarSwakei

3 months

-On Bonds ●The May bond; FXd1/2024/10 raised only Kes 11bn against a target of KEs 25bn ● The mrkt is not yet comfortable with long term papers ● Interestingly though, of the 11bn accepted, only 2.5bn was from institutional investors. The rest was retail participation

Analyst Stellar Swakei

@StellarSwakei

3 months

2. Govt Securities -Tbills ● Last week Tbill auction raised KES 25.8bn, against the offered KES 24bn ●Rates on all the Tbill papers slightly shifted upwards following 3 weeks of consistent decline (except the 91-day paper) ●Investors are back to demanding more

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Analyst Stellar Swakei

@StellarSwakei

1 month

I am always struggling with the reasoning behind govt proposals; GoK: Collections from Road Maintenance Levy have been reducing on lower demand of fuel due to high prices Kenyans: Then reduce the taxes and levies so we have lower prices GoK: No. We will increase the levy 🤦‍♀️🤦‍♀️

Julians Amboko

@AmbokoJH

1 month

Here's a big one! Motor Vehicle Tax may have gone but the Road Maintenance Levy is being bumped up 38.9% to Kes 25/litre from Kes 18.0

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Analyst Stellar Swakei

@StellarSwakei

8 days

Here is a visual presentation of the performance of FY23/24 budget. Of course we bit more than we could chew In summary, the budget was financed by 40% debt and 60% revenues - this for me is a concern because, fellow Kenyans, this debt was not necessarily spent on development

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Analyst Stellar Swakei

@StellarSwakei

10 days

In Kenya, integrity is a hidden gem And corruption will be our undoing!

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Analyst Stellar Swakei

@StellarSwakei

15 days

"No govt voluntarily reduces itself in size" Supplementary budget I has seen a KES 122bn net decline. ●Recurrent expenditure - down 34bn ●Development spending - down 122bn ●Equitable share - up 11bn ●CFS - up 24bn The fiscal deficit increases by 224.6bn

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Analyst Stellar Swakei

@StellarSwakei

20 days

Seems like the only fiscal consolidation language understood by institutions (like IMF) and rating agencies is raising more revenues. Does it mean they have little faith in the govt pursuing significant cuts? We are deep in the red zone and only two steps away from default

Mwango Capital

@MwangoCapital

20 days

𝐑𝐨𝐮𝐧𝐝𝐮𝐩 𝐨𝐟 𝐓𝐨𝐩 𝐁𝐮𝐬𝐢𝐧𝐞𝐬𝐬 𝐂𝐨𝐧𝐭𝐞𝐧𝐭 [𝟗𝐭𝐡 𝐉𝐮𝐥𝐲.]: 1. Moody has downgraded Kenya's long-term issuer ratings to Caa1 from B3.: "we do not expect the government to be able to introduce significant revenue-raising measures in the foreseeable future"

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Analyst Stellar Swakei

@StellarSwakei

9 months

I'm convinced that Kenya's currency woes go beyond the elevated US fed rates. I am inclined to think that the weakening mirrors pessimism regarding economic growth, mounting debt, ease of doing business, a struggling private sector, and an unprofitable equities market.

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Analyst Stellar Swakei

@StellarSwakei

2 months

As many have pointed out, this proposal if done correctly, may require the amendment of article 209 of the constitution which only accords the govt power to impose income tax, VAT, customs duties & excise tax. @AmbokoJH is right, why must we have the tax in the first place?

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Analyst Stellar Swakei

@StellarSwakei

5 months

In 2027, the KK regime's legacy will be clear: prioritizing debt repayment to prevent Kenya from defaulting..only that existing debt will not have reduced because expenditure is being financed by more debt. Development has been stalled

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Analyst Stellar Swakei

@StellarSwakei

14 days

Under supplementary budget 1 where recurrent expenditure is set to decline by 34bn, approximately 60% will be on the education sector. TSC gets the highest cut at KES 10.3bn State house comes third under the top 3 largest cuts😅

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Analyst Stellar Swakei

@StellarSwakei

4 months

On domestic Debt: 1. Tbill maturities upto June 2024 = KES 348.7b 2. Tbond maturities upto June 24 = KES 60.5b 3. Total maturities = KES 409.2b 4. Current net borrowing position =KES 359.4b 5. Borrowing room as per FY23/24 target = KES 111.7b 6. Maturities > borrowing room

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Analyst Stellar Swakei

@StellarSwakei

7 days

●A few departments spent all the development funds allocations ●Statehouse used 99% of the allocated funds while department of irrigation & lands commission spent 96% of the allocation Thought: We need these ministries to publicize the actual developments they do

Analyst Stellar Swakei

@StellarSwakei

7 days

Still on the FY23/24 budget performance, ● Recurrent expenditure recorded the highest absorption with 95% of the funds being spent ● CFS absorption came in at 89% with pension & gratuities lagging the most ● Gok paid 90% of the projected debt service

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Analyst Stellar Swakei

@StellarSwakei

8 months

Had a very interesting conversation with waheshimiwa @KuriaKimaniMP , and @MakaliMulu on the shilling depreciation. What we all agreed on is that the major challenge facing Kenya is the mounting debt which needs more attention on its management. Very good moderation by @OBurrows

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Analyst Stellar Swakei

@StellarSwakei

9 months

Inflation - 6.9%: within CBK range but cost of living still high Yields on gvt securities - 281bps up YTD USD/KES - down 22.4% YTD NASI - down 30.5% YTD Private sector PMI - down 10.47% YTD Cumulative bond turnover - down 12.9% Revenues - 16.4% below target Things are thick

Mwango Capital

@MwangoCapital

9 months

What is your assessment of the current state of the Kenyan economy? #MwangoChat

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Analyst Stellar Swakei

@StellarSwakei

21 days

If this happens, won't IMF be overreacting😅🤔. Didn't we say we are working on our spending? Fiscal consolidation is fiscal consolidation Anyways, in the words of @IEAKwame , "This is our mess, let's fix it". There are very many areas we can save spending from

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Analyst Stellar Swakei

@StellarSwakei

6 months

On CBK acquiring dollars from the market, our speculations were right. My worry is that now even the Bank itself is contributing to the demand for dollars in a country where the biggest problem is demand and supply mismatches - maybe the IMF loan, will cool things off a bit

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Analyst Stellar Swakei

@StellarSwakei

1 month

We can blame everybody including IMF but our problem will remain overspending with nothing to show for it. As heavy as the burden has been, truth is, we have been toiling for salaries and debt servicing. Cut Spending! Cut Recurrent Expenditure! Restructure Debt!

Nderi, J

@nderi_j

1 month

How did we get here? Overspending! How do we move on from here? Reform parliament Cut spending Amend the constitution to include spending caps!

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Analyst Stellar Swakei

@StellarSwakei

1 month

@ehdande @PSCharlesHinga @aomenya @BD_Africa @nderi_j Also add the number of houses so that we compare with the 250k target. Let's see where we stand

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Analyst Stellar Swakei

@StellarSwakei

11 days

It's actually very unfair to refer 6,000 people as Kenyans. 0.01% of the population can't be a representation of Kenyans

Capital FM Kenya

@CapitalFMKenya

12 days

Kenyans want Kindiki, Duale, Chirchir, 4 others re-appointed to Cabinet – Politrack Africa

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Analyst Stellar Swakei

@StellarSwakei

6 months

In the spirit of the new issuance, this is how the Eurobond looks like (snippet below). At the 10.375% YTM, which gives the 97.27 price, the absolute discount is $40.95mn. Simply put, gok will receive $1.46bn but will pay back $1.5bn

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Analyst Stellar Swakei

@StellarSwakei

18 days

@mytradesignals @coldtusker @ehdande @Mizani254 @MihrThakar @snaynek5 @RufasKe @MwangoCapital @SokoAnalyst @nderi_j This is purely development. It doesn't include salaries

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Analyst Stellar Swakei

@StellarSwakei

7 months

Nhif money is guaranteed cash that companies remit on behalf of their clients. As of 2022 (knbs data) 19m people were employed. So if we take the lowest amount one can be deducted n do the maths (19m*500), nhif collects more than 9b pm. Where does the money really go?

Citizen TV Kenya

@citizentvkenya

7 months

Confusion over NHIF cover: Patients feel the heat as private hospitals reject NHIF cards Private hospitals accuse NHIF of failing to release funds Lishenga: NHIF cardholders to pay Ksh1000 for outpatient care NHIF maintains gov’t has released Ksh5B to health facilities

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Analyst Stellar Swakei

@StellarSwakei

6 months

Guys, on 11th dec 2023 (week 50), CBK withdrew the max spread btwn indicative 2-way quotes, affording mrkt participants the flexibility to buy & sell FX at mutually agreed upon rates. Could this be one of the cause for the faster depreciation of KES vs USD🤔

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Analyst Stellar Swakei

@StellarSwakei

2 months

Kenyans, let's have this conversation. See you tonight!

Mwango Capital

@MwangoCapital

2 months

Tune into #MwangoSpaces today at 8PM EAT as we unpack the Finance Bill 2024. Guests: — @StellarSwakei from @investwithSIB — @kigenkiplimo from @kenya_chamber — @munyizacheaus from @EABL_PLC — @wanjohijb from @KAM_Kenya Host: — @Ramah_Nyang from @BloombergAfrica .

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Analyst Stellar Swakei

@StellarSwakei

1 year

@MwangoCapital The bumps represent the USD 235 mn and USd 447 m received in July and December from the IMF

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Analyst Stellar Swakei

@StellarSwakei

2 months

This is also interesting! ● All the eurobonds save for the 2 issued in 2018 have an armotized structure ● The 2027 note has three repayment periods of $300mn each from 2025 -less presure ● The next bullet payment we have is $1bn in 2028, which makes more sense if bought back

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Analyst Stellar Swakei

@StellarSwakei

13 days

@EricLatiff No government voluntarily reduces itself in size. We have to micromanage them in all stages. Look away for a minute and they want to add themselves salaries

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Analyst Stellar Swakei

@StellarSwakei

21 days

Champs! The effects of the Gen Z led protests were felt far & wide. In June, the private sector business conditions deteriorated the fastest since the year begun Demand fell, affecting the output and sales even as prices moderated. Managers remained largely pessimistic

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Analyst Stellar Swakei

@StellarSwakei

3 months

4. FX Market ●The shilling reversed its gains against the USD and regional currencies ● For the first time in 6 consecutive weeks, KES lost against the dollar, w/w ●The depreciation is as a result of the USD strengthening & not the KES weakening

Analyst Stellar Swakei

@StellarSwakei

3 months

3. Govt Securities ● Demand for Tbills declined as the overall performance dropped to 109% from 193% last week ●Seemingly, demand has shifted from the 91-day paper which has long boosted the performance of Tbills ● Investors seem to be more interested in the 364-day paper

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Analyst Stellar Swakei

@StellarSwakei

7 days

Still on the FY23/24 budget performance, ● Recurrent expenditure recorded the highest absorption with 95% of the funds being spent ● CFS absorption came in at 89% with pension & gratuities lagging the most ● Gok paid 90% of the projected debt service

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Analyst Stellar Swakei

@StellarSwakei

5 months

Here is the performance of the Eurobond buyback: 1. GoK offered to buy back $1.4bn, 2. Investors tendered $1.48bn 3. The gvmnt accept $1.44bn of the tenders. As per the offer, the repayment amounts to individual investors will be determined using a proration factor of 0.96

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Analyst Stellar Swakei

@StellarSwakei

3 months

1Q24 was an interesting period. We experienced several green shoots, some of them unexpected. Catch a glimpse of the fixed income & macroeconomic review below. Full video:

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Analyst Stellar Swakei

@StellarSwakei

7 months

The hike was aimed at mitigating currency induced inflation on the back of the weakening shilling. However, Kes continued to weaken against the $ even at a faster rate in the last 2 weeks - The slower growth is largely on the back of lower food prices n a higher base in dec 2022

Bloomberg

@business

7 months

Kenya inflation slows to an almost two-year low, days after the central bank announced the most aggressive interest-rate hike in more than a decade

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Analyst Stellar Swakei

@StellarSwakei

18 days

@Alvin_Willie @coldtusker @ehdande @Mizani254 @MihrThakar @snaynek5 @RufasKe @MwangoCapital @SokoAnalyst @nderi_j They chose to renovate in January because a new one would cost Ksh 2bn. Cumulatively, at the current trend they will end up using 10bn

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Analyst Stellar Swakei

@StellarSwakei

4 months

So far, 2024 has had several green shoots. Given the persistent blows over the last 2 years, is this a turning point? Are we off the hook? Join me as we have this conversation on 1st April 2024 together with @Mizani254 @Ustawi254 @snaynek5 #Savethedate

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Analyst Stellar Swakei

@StellarSwakei

24 days

@AmbokoJH The bond has been greatly undersubscribed in almost all issuances, but KES 488mn is the low of lows😂. The last time a subscription was in millions is 7 years ago🤭

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Analyst Stellar Swakei

@StellarSwakei

4 months

Patterns often repeat themselves: 1. The volatility we're seeing with the shilling was also an occurence in late 2011 - early 2012 2. The CBR reached a high of 18% same period 3. The yield curve inverted for a solid 6 months Will we see another decade of calm after this?

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Analyst Stellar Swakei

@StellarSwakei

3 months

My key takeouts are (comparison between FY23/24 target & FY24/25 eatimates): 1. Expenditure is expected to go up by Ksh 83bn 2. Revenue is expected to rise by Ksh 461bn 3. Debt service is expected to go up by Ksh 33bn 4. Net borrowing is set to reduce by Ksh 394b

Analyst Stellar Swakei

@StellarSwakei

3 months

The FY24/25 Budget summary has a lot to unpack. In the spirit of living within our means, the expenditure has been reduced from the earlier target/estimate of Ksh 4.2tn to Ksh 3.9tn *Note that it's a reduction of the estimates

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Analyst Stellar Swakei

@StellarSwakei

18 days

@WRoselyne_ @coldtusker @ehdande @Mizani254 @MihrThakar @snaynek5 @RufasKe @MwangoCapital @SokoAnalyst @nderi_j 🙏🙏

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Analyst Stellar Swakei

@StellarSwakei

6 months

FX rates on the CBK website are based on weighted interbank rates. Doesn't include FX bureau rates. With this kind of structure, are the bureau transactions that insignificant?

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Analyst Stellar Swakei

@StellarSwakei

28 days

With the ongoing protests, KES lost against most relevant currencies last week in what seems like a shift of sentiment. Having been supported by positive perception for a while now, it's clear that KES remains sensitive to fluctuations and perspective - Not fundamentals

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Analyst Stellar Swakei

@StellarSwakei

5 months

FX Market; 1. The shilling performance chart shows a resurgence of reds i.e depreciations. 2. Week on week, KES lost against 4 of the major relevant currencies and gained against two; USD & TZS 3. We are seemingly resuming the depreciation rollercoaster - that was fast😅

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Analyst Stellar Swakei

@StellarSwakei

6 months

Just a few illustrations of USD rates today. Selling at upto KES 168/dollar and buying at as low as KEs 156/dollar. Meanwhile, CBK has the exchange rate at 160.19. Apparently, the dollar weakened against KES by 0.7% from yesterday's rate. CBK seems to have their own rate🤔

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Analyst Stellar Swakei

@StellarSwakei

7 months

The NSSF rates are set to increase annually over the next 4 yrs, not only this year. I contend that such policiesshould be accompanied by efforts to raise the min wage, salary increments, lowering NSSF dues, and enhancing returns with the same frequency - shouldn't be onesided

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Analyst Stellar Swakei

@StellarSwakei

2 months

●Non competitive bids have become prevalent accounting for 80% of the accepted bids for the 91 and 364 day papers in last week's auction ●This raises suspicion on the influence of the govt especially after the revelation that the housing levy funds are being invested in bonds

Analyst Stellar Swakei

@StellarSwakei

2 months

2. Govt Securities ●The week's Tbill auction was fully subscribed ●The govt managed to raise Kes 23.7bn which offset maturities worth Kes 12.4bn ● The additional domestic debt for the week came in at Kes 11.3bn

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Analyst Stellar Swakei

@StellarSwakei

1 month

With all eyes on the parliament today and tomorrow, the #financebill 2024, as is, is expected to raise KES 302bn while the FY24/25 budget is projected to increase by KES 154bn. The largest Finance Bill against the slowest budget increase(quantum basis)

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Analyst Stellar Swakei

@StellarSwakei

2 months

As expected, CBK has maintained the CBR at 13%. It makes sense to retain the rate till the major economies especially the US starts cutting - for capital flows sake

Analyst Stellar Swakei

@StellarSwakei

2 months

4. Upcoming Events ● CBK's Monetary Policy Committee is set to meet on Wednesday 5th June ● Expectation is that they will retain the policy rate at 13% - inflation is well anchored, KES is stable against the $ ● Maybe a bit early to cut, especially before advanced economies

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Analyst Stellar Swakei

@StellarSwakei

5 months

When we claim Kenya has a spending issue, not a revenue issue, this is what we imply. What's the point of fiscal consolidation if we solely prioritize revenue boosts without addressing expenditure? At this pace, achieving better social amenities and essentials might be impossible

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Analyst Stellar Swakei

@StellarSwakei

4 months

And over the last 2 years, a lot of developments have unfolded with both the monetary and fiscal agent, strategically deployed to counter KES losses n inflationary pressures Here's a little summary of the events that have had significant effect on dollar supply n demand dynamics

Analyst Stellar Swakei

@StellarSwakei

4 months

Mother shilling😅: 1. KES resumed its appreciation following a w/w depreciation against most 2. The pace of strengthening was faster than the last 3 weeks Take: the rally is a behavioral economics play amplified by uncertainty surrounding the KES equilibrium point

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Analyst Stellar Swakei

@StellarSwakei

3 months

2. Open Market Operations ● The CBK injected KES 166bn into the banking system ●Initial plan was to inject KES 180bn but banks asked for KES 203bn ● The higher demand for cash supply ftom CBK reflects the tightened liquidity

Analyst Stellar Swakei

@StellarSwakei

3 months

Weekly Recap: 1. Interbank Market ●Liquidity in the money market deteriorated in comparison to the previous week ●The lending rates rose to an average of 13.7% from 13.4% ●As the volumes traded declined to an average of KES 21.1bn from KES 24.6bn last week

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Analyst Stellar Swakei

@StellarSwakei

4 months

As expected, MPC retains the benchmark rate at 13% citing that previous rate hikes have had positive outcomes

Analyst Stellar Swakei

@StellarSwakei

4 months

The MPC is meeting tomorrow, 3rd April 2024. My expectation is a retention on the back of: 1. Inflation is rapidly approaching the midpoint - 5% 2. The persistent strengthening of the KES 3. The need to push down rates on gvmnt securities 4. The need to boost economic growth

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Analyst Stellar Swakei

@StellarSwakei

10 days

@AmbokoJH @IEAKenya @DevEconNetwork Very interesting insights! The government more than ever needs to sit down and weigh the options. Debt has become a behemoth affecting every other indicator no matter how small. It's not rossy at all

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Analyst Stellar Swakei

@StellarSwakei

4 months

Wondering why we look at the interbank market? 1. Banks hold more than 45% of GoK's domestic debt 2. The financial sector is a notable contributor to GDP 3. Liquidity determines what banks invest n lends out 4. It contributes to profitability of banks

Analyst Stellar Swakei

@StellarSwakei

4 months

Weekly Recap: 1. Interbank Mrkt - Liquidity improved as the interbank lending rate eased to 13.2% from 13.6% - This was despite the increase in demand in the mrkt - The no. of interbank deals rose, leading to a 45.3% rise in volumes traded during the week

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Analyst Stellar Swakei

@StellarSwakei

2 years

@MwangoCapital Please note that the price of a stock does not necessarily reflect the performance of a company. Safaricom has been out and about trying to diversify their revenues whilst prividing customer satisfaction in the face of a disrupted economic environment,

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Analyst Stellar Swakei

@StellarSwakei

5 months

Weekly Recap: 1. Liquidity in the money market improved 2. The average interbank lending rate declined to 13.6%, from 14.1%, the previous week. 3. CBK maintained its support to banks in the repos market 4. It injected KES 171b worth of liquidity into the market

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Analyst Stellar Swakei

@StellarSwakei

5 months

Weekly recap: Liquidity strains continued to prevail in the money market evidenced by the slight uptick in the inter bank rate. Nonetheless, the rates conformed to the interest rate corridor set by the CBK at 10.5% - 15.5%

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Analyst Stellar Swakei

@StellarSwakei

6 months

Let's see, 1. The shilling has depreciated against the dollar by 4.4% since the hike. 2. Inflation rose by 30bps to 6.9% but still remains within range 3. Credit to the private sector has become more expensive given that most banks adjusted their lending rates upwards

Analyst Stellar Swakei

@StellarSwakei

6 months

The aim was to counter currency induced inflation which the committee noted contributed 50% to the overall inflation. What has been the effect so far?

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Analyst Stellar Swakei

@StellarSwakei

2 months

As we absorb the very many budget related publications, here are the biggest winners & losers under the supplementary budget II ● The National Treasury gets the highest increase ● Department of roads gets the highest cut - development spending suffers the most on budget cuts

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Analyst Stellar Swakei

@StellarSwakei

3 months

This Week: 1. KNBS to release inflation figures tomorrow - Projection is that the figure will fall between 5% and 5.3% 2. The final budget estimates are expected to be submitted today to the National Assembly -Note that the MTRS is expected to commence in the next fiscal year

Analyst Stellar Swakei

@StellarSwakei

3 months

4. FX Market -The KES reversed its gains against most key currencies - Meanwhile the dollar index weakened by 0.5% on weaker than expected 1Q24 real GDP growth for the US economy -We still see the movement of the KEs as a sentiment play as uncertainty on its equilibrium persist

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Analyst Stellar Swakei

@StellarSwakei

7 months

SIB's 2023 fixed income & macros review report is out. Significant to highlight is that bond investors posted losses on their portfolios primarily due to the surge in interest rates on gvnt securities. But, as tides ebb and go, bad seasons come and go

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Analyst Stellar Swakei

@StellarSwakei

16 days

Word!

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Analyst Stellar Swakei

@StellarSwakei

5 months

And finally, the shilling maintained its rally against major relevant currencies, albeit at a significantly slower pace than the previous week. Like a flash in the pan, blazing fiercely and extinguishing swiftly😅

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Analyst Stellar Swakei

@StellarSwakei

2 months

On our weekly recap: 1. Interbank Market ●Money supply in the interbank mrkt remained stable ●The average lending rate rose marginally to 13.51% from 13.5% ●The average volumes traded increased but the number of transactions dropped an indication of hige one off trades²

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Analyst Stellar Swakei

@StellarSwakei

7 months

In 2023, the shilling hit a record high slide against the dollar, losing 26.8% in what seemed closer to the depreciation recorded in 2008 following the post election violence. Where do you think the slide will stop?

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Analyst Stellar Swakei

@StellarSwakei

3 months

On bonds: - The tap sale on the May bond underperformed - FXD1/2024/10 has a tenure to maturity of 9.8yrs and a coupon rate of 16% - A bit less attractive if you ask me - Investors are still not yet persuaded to hold long-term papers and it makes sense

Analyst Stellar Swakei

@StellarSwakei

3 months

2. Govt Securities -Tbills were oversubscribed by more than double - CBK received Kes 54bn in bids against the 24bn offered but accepted kes 50bn -The value of the bids coincided with a relatively similar value of maturities - Investors know when to push the government

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Analyst Stellar Swakei

@StellarSwakei

9 months

Today's T-bills auction was significantly oversubscribed, the highest subscription post pandemic. The overall subscription came in at 255.6%, the highest since July 2020 mainly supported by a revived interest in the 182-day paper. Pro tem, the rates are slowly approaching 16%

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Analyst Stellar Swakei

@StellarSwakei

7 months

The chart below depicts the weeks in which the KES lost more than a shilling against the dollar in a week. The week ending 22nd Dec recorded the 2nd most substantial loss in 2023 - this is despite the 200bps CBR hike meant to slow the pace of the depreciation

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Analyst Stellar Swakei

@StellarSwakei

4 months

Performance rate: 1. Gok has achieved 55% of the tax revenue targets 2. To meet the tax revenue targets, KRA has to collect kes 288bn in the remaining 4 months 3. The 288bn is way ambitious so likely KRA won't meet the revenue targets for FY23/24

Analyst Stellar Swakei

@StellarSwakei

4 months

Exchequer issued - 1st 8 months of FY23/24 (upto feb) ● Revenues 1. Cumulative tax revenues rose 11.2%y/y to 1.4tn, from 1.2tn last year feb 2. Feb tax revenues fell by 4.8% to 157bn, from 165bn in Jan 3. Tax revenues generally rise at the end of every quarter

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Analyst Stellar Swakei

@StellarSwakei

10 months

I keep saying that the inflation figure is majorly softening because of a higher base effect and does not fully reflect the actual changes in prices. A 6.8% rate in sept compared to 6.7% in aug means that prices of goods rose by 1% within the month and by 6.8% from a year ago.

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Analyst Stellar Swakei

@StellarSwakei

4 months

Meanwhile, the CBK is not resting; -The authority injected KES 121bn via 7day,8day & 14day reverse repos -The average rate of the issuances was 15.5%, the highest since the year begun -On Thursdsy CBK offered 20b but there were no takers

Analyst Stellar Swakei

@StellarSwakei

4 months

Weekly Recap: ● The Money Market - Liquidity in the interbank market toghtened further - There was more demand for cash prior to the begining of the Easter holiday which coincided with the WRC -However interbank volumes traded declined by more than a third

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Analyst Stellar Swakei

@StellarSwakei

6 months

As we wait for MPC's decision today, let's have a look at the recent actions (since Jan 2022). The highest raise was in the previous meeting in which the Committee raised the base rate by 200bps.

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Analyst Stellar Swakei

@StellarSwakei

6 months

On the forex front, KES is demonstrating relative stability especially against the dollar. In the MPC briefing last week, the CBK governor insisted that the currency had overshot its depreciation, hence there is scope for CBK support. Hoping the stability lasts

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Analyst Stellar Swakei

@StellarSwakei

11 months

So picture this, only 6.3% of the Kenyan population, is carrying the burden of the key source of revenues. Keep in mind other taxes as well as black tax. Imposing more taxes on this minute %ge does not come off as a viable solution to increasing revenues. It has more downsides

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Analyst Stellar Swakei

@StellarSwakei

2 months

On our weekly recap: 1. Liquidity ● Availability of cash improved further in the interbank market as the lending rate dropped to 13.2% from 13.5% ● There is an observation that customer deposits are growing faster than loans implying that banks are left with more cash in hand

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Analyst Stellar Swakei

@StellarSwakei

8 months

As the banks earnings season gathers pace, it is important to note how NPLs have been going up overtime. Trade sector leads the row. This in my view reflects the deteriorating business environment characterized by higher expenditures, delayed payments and little to no expansion

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Analyst Stellar Swakei

@StellarSwakei

6 months

MPC has raised the CBR by 50bps to 13%. What then should we expect: On the downside 1. Even more expensive loans 2. Higher borrowing costs for gok as yields on new issuances will remain elevated 3. Private sector business conditions will remain subdued as demand will reduce

Analyst Stellar Swakei

@StellarSwakei

6 months

As we wait for MPC's decision today, let's have a look at the recent actions (since Jan 2022). The highest raise was in the previous meeting in which the Committee raised the base rate by 200bps.

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Analyst Stellar Swakei

@StellarSwakei

4 months

News: ●Private Sector Business Environment -Business activity eased in the month of March on lower new orders -Deapite easing inflationary pressures, Kenyans are still grappling with lower disposable income -spending & demand for goods is still low (as per stanbic bank PMI)

Analyst Stellar Swakei

@StellarSwakei

4 months

Weekly Recap: ●Interbank Market -Liquidity was relatively stable during the week - Interbank lending activity increased but not significantly -The CBK discount window was active but only KES 6.6bn was lend out to banks

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Analyst Stellar Swakei

@StellarSwakei

5 months

@TheBundox @coldtusker @ehdande @investwithSIB @MihrThakar @Mizani254 @MwangoCapital @RufasKe @SokoAnalyst Again, I don't know which source you're referencing but you can always plot your chart, cite your source and push your narrative

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Analyst Stellar Swakei

@StellarSwakei

11 months

On taxes and levies, VAT is our main culprit - wasn't the case before it was doubled to 16%. We are looking at higher inflation figures for the near term and an even higher cost of living - but as they say "in every crisis, there's money to be made", we just have to know how

Analyst Stellar Swakei

@StellarSwakei

11 months

Even then, taxes and levies continue to weigh on fuel prices a great deal. The segment accounts for almost 40% of petrol prices and over 30% of diesel and kerosene prices. What bothers me is the fact that almost all economic sectors of this country, use fuel in one way or another

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Analyst Stellar Swakei

@StellarSwakei

4 months

-CBK governor cites that minimal pressure on domestic borrowing will help push down rates on government papers -Budget deficit will likely be offset by significant external financing -Kenya is set to receive $1.2bn from World Bank in April & not less than $1bn from IMF in June

Analyst Stellar Swakei

@StellarSwakei

4 months

●Yields As we ask whether 2024 is a turning point; -The rates on all treasury bills declined -For the 91-day paper, the decline was the first in over a year - There is also a notable deceleration of interest rates hike across board

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Analyst Stellar Swakei

@StellarSwakei

3 months

Weekly Recap: 1. Interbank Market ●Liquidity in the money market deteriorated in comparison to the previous week ●The lending rates rose to an average of 13.7% from 13.4% ●As the volumes traded declined to an average of KES 21.1bn from KES 24.6bn last week

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Analyst Stellar Swakei

@StellarSwakei

28 days

And unfortunately, Kenya has been a place where criminals and bad behavior is rewarded - those involved in fraud or corruption, have higher chances of better lives🤦‍♀️

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Analyst Stellar Swakei

@StellarSwakei

5 months

On FX: KES attracted too much noise during the week. W/w; 1. KES rallied against all relevant currencies 2. Highest gain (10.8%) was on the UGX and lowest (8.1%) on the TZS 3. FX reserves droped by 1.4% to $7.0bn 4. Jan diaspora remittances hit a record high of $412mm

Analyst Stellar Swakei

@StellarSwakei

5 months

On the international market; 1. Eurobond yields were on a downward trajectory with 72.2% of KENINT 2024 buyback all but complete 2. Following the development, Fitch ratings also affirmed Kenya's rating at B, with a negative outlook - shares similar apprehension with S&P global

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Analyst Stellar Swakei

@StellarSwakei

2 months

Stanbic Bank PMI data indicates that the private sector business environment expanded in May. Costs and demand are alligning well under the sector. Concern: Will the Finance Bill 2024 reverse the positive strides? Most likely

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Analyst Stellar Swakei

@StellarSwakei

2 months

For almost the whole of 2023, the private sector business space was in the contraction zone, but manufacturing sector seemed to suffer the most. The sector players kept citing 1. Tax burdens, and 2. High costs of inputs, as the major constraints. Well, the growth decelerated

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Analyst Stellar Swakei

@StellarSwakei

9 months

According to Bloomberg, the Ksh is less over valued currently (c. 7%) as compared to a year or so ago (c. 20%) - We should see less sensitivity as the figure approches 0%

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Analyst Stellar Swakei

@StellarSwakei

2 months

4. Upcoming Events ● CBK's Monetary Policy Committee is set to meet on Wednesday 5th June ● Expectation is that they will retain the policy rate at 13% - inflation is well anchored, KES is stable against the $ ● Maybe a bit early to cut, especially before advanced economies

Analyst Stellar Swakei

@StellarSwakei

2 months

3. Mrkt News Inflation ● prices of goods & services for the montb of May rose by 5.1% y/y & by 1%m/m ●The increase was due to a spike in vegetable prices & a faster increase in electricity prices - KPLC had however indicated that prices would fall in May, not sure what changed

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