Game over??
The last couple of days have been painful for investors at the NSE, the markets have continued their steady orderly decline and are right now sitting at the 200 day moving average support.
This is my last level of support for the market and should this be broken, then expect further weakness ahead.
Looking at the weekly picture, its evident that the market is currently rolling over after attempting to break that strong weekly MA (50) resistance. At this point, I expect the 3000 level to be psychological support for the market.
Wow… that decline has been really strong. This is a three month chart of the price-weighted All-Share Index and I must say it puts things into perspective.
Consider that since that “doublet top” that completed on Aug 7th, the index has registered a 5.8% decline. Consider also that this decline has happened on increasing volume and the RSI has been setting new lows. The 50 day moving average was broken and the last remaining support is the flat 200 day moving average which rests at 65.62. the intensity and speed of this move lower has been impressive and it leaves me wondering what will happen should that MA (200) support be taken out. I dare to say that we might see an acceleration to the downside. My only wish is that there was a way to short (bet on the downside) this market…
am not so sure whats really going on in our market, the only thing i can maybe attribute the pullback to its maybe uncertainty, there are a lot of things that investors are looking at right now in Kenya and not liking, Energy Production is one of those things, it remains a mystery as to how Kenya will be able to support its industrial growth without enough power, most investors are not quite sure on that, the floating of corporate bonds at the NSE by various” Major” companies haven’t helped either, started with safari com and now we have seen more companies do that….. overall this is a step into the right direction( like i and you have talked about investors finding the NSE as a lucrative source of their capital for expansion)but to the average investor this sends chills into their spines on those particular companies, off course the CMA haven’t helped either by not speeding their reform agenda. Lastly i think Kenyans are really struggling to fill their stomachs right now and as usual that will affect the NSE negatively, no doubt.
my take is that when people are hungry, unemployment is growing and poverty keeps getting worse, then there is no way that the country will grow- and without economic growth, then there will be no capital growth and without capital growth, then the equity markets will most definatly experience a downturn. the key is to spur economic growth and thats squarely on the shoulders of the government. they have to create a conducive environment for economic growth that in turn encourages risk taking which leads to capital growth.