This is a Buy Market; an Investor’s Orgy.

Those holding shares in the Nairobi stock Exchange as in most world capital markets are receiving the beating of their lifetime. From the Asian tigers through Europe to the United States, the markets are a seesaw downwards. Kenya is not a seesaw but just a slide into a hungry bear’s mouth. From a high of over 6000 points in 2007 in the NSE 20 share index, we are now standing at a paltry 3200 points, a figure yet to bottom out. The share prices have plummeted and those not in the market for the long haul is being dragged under by the stocks plunge.

 

There is an inherent beauty in these financial crises, but only if a collapse can be avoided. The prices are now at the lowest they have ever been or have acquired new lows that would otherwise never have been. At these prices, the potential for making a huge killing once the markets rebound is exponential. This is a buy market in which mere return to the market level informed by fundamentals will translate to huge profits for those who dare buy today.

 

I would buy these shares myself but my hands are tied since I just sold all of my previously owned shares in order to finance my investment course through the CFA Institute.

 

But one thing that I am yet to find a logical explanation to is the issue the USD whose value against the Kenyan shillings has appreciated too soon, too quickly and stranger still at the backdrop of the impending the US financial turmoil. Whereas I was to pay only Kshs 61,000 a few months back, I am now forced to fork out close to Kshs 90,000 in fees alone. That is the pinch that a common man like me feels when the exchange rates change. The causes for it are sighted as speculative due to trading between banks, or representative of a global trend, but I am yet to understand the actual cause of this depreciation of our currency only to the dollar, and not other hard currencies.

 

The bottom-line is that this is the time when demand is lowest, supply is highest and consequently shares are cheapest. Those with disposable incomes should flock the market and amass as many shares as they possibly can. This might stop the panic selling currently going on and drive the price up once again.

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