NOT YET...BOTTOMED OUT 


The markets started rising last week after the Global Central bank rate cuts and the various European rescue packages.Players are saying that the worst is over,the eye of the storm has passed.
The comentators on CNN,CNBC are predicting a recession but no more really BAD news.

I think they are wrong.Here's why i think so:

1) Real economy slowing down
The slowing economy in the west will affect the consumer portion of banks' balance sheets.I.e. people will begin to default on car loans,credit card loans etc.These loans were securitised ina similar manner to morgages.Banks have to write off all these loans.More write-offs reduce Capital.Banks are forced to slow down lending or raise more capital.Either measure affects the real economy.

2) Commodity Prices
Oil,steel ,wheat just about any heavily traded commodity has declined by over 20% from year highs in the past 2 monhs.Oil is below US$ 90/barrel.At mid-year 2008 everyone and their grandmother was predicting US$ 150/barrel oil by the end of the year.Lots of hedge funds and other 'sophisticated investors' bet on commodities rising for the rest of the year.
As these losing bets on commodities are unwound and some fail to make margin calls expect another implosion in the markets.

ARMS TRADE 101


I don't want to wade into the flood of news and reports about the hijacked ship and tanks.The papers are doing a good job.The world of arms trading is a simple business but with complex details.

Firstly, arms are usually sold to STATES and NEVER individuals or non-state groups i.e. Taliban,FARC,Lords Army.......etc

Secondly,Only states without an embargo such as a UN Arms Embargo can purchase.

Thirdly, to sell to a State it must produce an End User Certificate.This is a document that states that X amount of weapons and equipment bought from Z industries is being procured for the sole use of Government Y.Hence, we are within the first rule.

Tough situation for any arms dealer or manufacturer.You have clients but they aren't a sovereign state yet, they are going to work on how to legitimise themseleves using the arms you intend to supply.Then fortune smiles on you and you remember there several Third World states like DRC,Liberia(under Taylor) and a few others that don't have proper Government Procurement and Oversight.
The correct incentive to the right official guarantees the supply of several blank End User Certificates.How you use the Certficates is up to you.

Now the arms factory(and its host country) can sell the weapons to you and pretend they didn't know it was for a guerilla outfit(or semabargo busting) because you had all the documentation.

A really good movie that satirises the trade is Lord of war starring Nicholas Cage.

CREDIT RATING,BANKS,BONDS and SEPTEMBER


September 2008 was a good month.At least on the legislative and regulatory front.Two interesting developments that serve to deepen our financial markets occurred.

1.Credit rating regulations Gazetted by the Government.
Banks and other financial institutions can now share information on your payment(defaulting habits).Hopefully it will move to all businesses including your landlord.Any body with access to your credit information will be able to judge how honest you are on your promise to "send the check by Friday".
If it works like other countries it should make it easier for persons with good credit histories to get loans at good terms from their banks.Businesses with good history will find it easier to get supplier credit.
The flip side is that a bad credit rating will make it difficult to even rent a good house-(if ur prospective landlord sees that your score is bad, he may not want your tenancy).

2.Banks allowed to lend to each other using their securities as collateral
This may confuse those who don't deal with banks, how can a bank keep cash but run out of liquidity?Banks are like any business enterprise sometimes they need more cash than they keep at hand.When this happens, they have two ways of raising cash:-

A. Borrow money from the Central Bank (CBK)through REPOs(Repurchase agreements).These transactions involve the Commercial bank using its Treasury bonds and bills as security to borrow from the Central Bank

B.Borrow money from each other via the Interbank market
The new rules add a C option.

C.The new interbank master repurchase agreements.The transactions here are similar to REPOs the difference being that instead of having CBK and a bank transacting, we have a commercial bank to commercial bank transaction the borrowing bank gives securities to the lending bank as collateral for the lending.

Too bad the papers got it wrong and thought that everyone could trade bonds without going to the NSE.CMA came out with a clarification that this wasn't ain't so.

2 bedroom,Apartment for sale-Karen

No, am not selling real estate.I was in Karen a few weeks ago and what i saw confirmed what the Sunday Standard talks about in today's edition.the greed that changed Kileleshwa into a more expensive version of Umoja/Kayole has reached Karen.A decade ago when i lived in Karen,there were no matatus(just an old no.24 minibus).Most houses sat on at least more than 0.7 Acres(can only vouch for my neighbours then).

Land prices in areas of Nairobi that have access to the utilities-water and electricity have at least doubled in the past 5 years.Think South C,Kileleshwa,and Westlands.Developers have discovered a sure fire way to make money.First, buy or get into an arrangement with a land owner to access land in Lavington,Westlands or Kileleshwa.Second,get the building plans approved.Third,line up financing for the construction and mortgages from a bank.Fourth,put the artistic renderings of your XYZ apartments in the papers.Fifth,make sure you sell 80% of the apartments before construction.Sixth,bank your profits and consider yourself a successful real estate developer.

The danger of buying an apartment
The only selling point that most of the apartments have is that they are in a formerly expensive area like Hurlingham,Kile or Westlands.Otherwise,most of them have no new social infrastructure e.g. schools,social centres or recreational space.

If you are a snob please read on.Apartments tend to get poorer dwellers moving in as time goes by.i.e. if the first generation of owners were multi-millionaires by the second or third generation significantly poorer people will be living there.Therefore,snob appeal goes down and rent follows it.If you don't believe me take a look at the 1970s and early 1980s apartments that were built around Hurlingham and State house, those that aren't offices can't command rents of more than Ksh 40,000 per month. The rents for most of these new apartments will keep declining rather than increasing.Nairobi residents who pay rents of more than Ksh 50,000 per month want exclusivity not location brands. I don't get the rationale for buying an apartment.

Where is the housing market going?
Human beings value what they can't get or anything that has scarcity.I think the market will move towards gated communities a la Kihingo for the rich and detached single family units for the not so rich.If you do see a headline, like the one on this post in the daily classifieds then we will have hit the top of the market.

A-Team at wahi kuwahi
Is it me or is that the A-Team theme song in the background of coca-cola's wahi kuwahi radio spot?

WHERE HAVE I BEEN?

2008 has been an exciting year.I have been doing a bit of travelling and plunged into a new venture.There are many opportunities to make profits in the current global financial crisis.

Going forward, i shall do fewer articles that deal with specific investment ideas like this one.Most of the posts will deal with macro ideas and observations on ideas and trends that will shape our kenyan society.I'm being selfish and wont give away my current strategies.

Thank you to all those who comment for the witty,critical and sometimes ignorant comments and most of all ,everyone who visits this blog.

BUDGET 2008

I must confess i was pleasantly surprised, i expected capital gains Tax, more taxes on second hand vehicles etc.First it was smaller than i expected at about Ksh 720 billion(was expecting a Ksh 850 billion plus budget). Here are the specifics:

THE GOOD
-Stronger Regulation for the Capital Markets.There are now restrictions on ownership of stockbrokers,investment banks and fund managers.By the way Banks,Insurance companies and similar corporate entities are exempt from these restrictions.
Let us hope that the new rules will keep us from a repeat of the Francis Thuo,Nyaga stockbrokers debacles.
The new ownership requirement will increase the number of politically correct persons(read new ODM personalities) with stakes in the Capital markets.i.e. has anyone noticed who owns the stock brokerage firms?

-No new taxes on personal or corporate incomes.What can i say? More taxes= less disposable income. -Senior citizens over 65 years of age exempt from taxes on their pensions.

NOT GOOD
-New capital requirements for banks. I thought Ksh 1 billion in core capital over 2 years was a joke.
I approximate over 60% of the banks are multiples over this Ksh 1 billion core capital amount.For example if Housing Finance successfully completes its rights issue,the core capital will be over Ksh 2 billion.Barclays has over Ksh 5 billion. The requirement is unlikely to spur mergers and acquisitions.

-No Value Added Tax decrease
VAT acts as a drag on consumption.Lower VAT and consumption might get a kicker with all the added benefits e.g. higher demand in the economy.

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APPLE 3G IPhone
Apparently,Orange/Telkom Kenya have the rights to sell it in Kenya.
http://www.apple.com/iphone/countries/ke/

THE RULES OF POWER

Ahh…finally back from my sabbatical May I point out I’m not an ODM or PNU die-hard, I detest politicians but this post is merely an interesting observation. The former President Moi was a disciple of Machiavellian politics. He perfected the act of conjuring a rabbit out of a hat. He would perform the unexpected and agree to a previously unacceptable position. Remember, when he appointed Richard Leakey, one of his political opponents the Head of the Civil Service?

On the other hand, Prime Minister Raila’s strategy seems to be straight out of the 48 Laws of Power by Robert Greene. A few weeks ago the Prime Minister’s office was wracked by internal infighting (according to Kumekucha-whose a liar-but that's a story for another post) and dissent in the ODM party concerning the Grand Opposition and the Amnesty issue(according to the Daily Nation and EA Standard).The negative press was hammering Agwambo’s standing in the eyes of the public.Skeptics wondered if the invincibility of tinga was just a myth.

The PM quickly found a way out of the mess that was hurting him; he distracted the Public. How? He entered into the Mau forest fray. Now the news headlines are full of politicians for and against settlement in the Forest . Nobody remembers ODM’s internal struggles or the PM’s staffing issues.

On Nyanza politics Raila’s motto appears to be ‘Keep your friends close and your enemies closer’.Notice that all of Raila’s political foes in Nyanza are now Ministers.Dalmas Otieno(formerly a KANU rival),James Orengo and Anyang Nyongo(formerly SDP rivals).These individuals posses either the intellectual or organizational ability to challenge him politically on his home turf.

Now that they are closer to him, his rivals can’t use them to fight him.

Law 31 from the Laws of power states- “Control the Options: Get Others to Play with the Cards you Deal”.The current tussle over whether or not the Government should negotiate with the Mungiki aptly illustrates its application.

Who started the debate? If you guessed Raila that’s right.

Who is struggling with the issue? Central Kenya politicians.All of a sudden political,religious and civil leaders from the region are falling over themselves to appear to be backing the proposed talks with Mungiki.

Whose deck are they playing? Certainly not theirs.

STOCKBROKERS,BANKERS...DINOSAURS & EVOLUTION

The dinosaurs were wiped out by a meteorite? Then mammals took over then the hominids..homo erectus, Neanderthal man then us(Homo Sapiens).Twenty years ago the Banking sector had 2 large foreign owned banks(Barclays and Standard Chartered)The other two heavies were Government owned(KCB and NBK).The rest of the banks and Building Societies were family owned i.e. owned by a businessman who lent to his pals/family and kinsmen.

Then the Banking crises of the 1980s and 1990s came along, and a number of the smaller banks folded. The surviving banks were bought by better entrepreneurs, merged and recapitalised.Out of these ashes arose Banks such as EQUITY(formerly Equity Building Society)

Fast forward to 2008.most of the banks are hardly family controlled. The few family owned and controlled banks are small and decreasing by the year through acquisitions.

There's another industry that is structurally in the same position Banking was 20 years ago.-STOCK BROKERAGE.

Most of the brokers are family/individually owned, the sector doesn't have many controls. The firms’ capital bases are small.

My take is that in the next 3 years most of these firms will be taken over by bigger players (read banks) and soon stock brokerage will be an extension of the banking business .e.g. CFC Bank +CFC financial Services, NIC Bank and solid Stocks.

In 3 years there will probably be more brokers licensed i.e. once NSE is demutualised.However,the business will probably be controlled by a few players who will be owned by banks.

YIPEE.. TWO BLACK AFRICANS ON THE FORBES LIST

For a long time the FORBES Billionaires list had only three Africans on the list. The Openheimer Family-heirs to the De Beers fortune,Johan rupert -BAT and Richemont and the Sawiris owners of the ORASCOM group.The Openheimer's and Rupert's are white Africans and the Egyptians are Arabs.(hope i dont seem racist).

Now we have two black Africans Aliko Dangote of the DANGOTE Group Nigeria and Patrice Motsepe of the ARM mining group( Patrice has a 5.5% stake in SANLAM the parent co. of Pan Africa Holdings -Kenya).

All great wealth tends to attract controversy.Dangote is accused of being too close to the former President Olusegun Obasanjo.Motsepe is accused of using black empowerment laws to enrich himself.

The FORBES list favours those whose wealth is in listed firms.Hence, as more of the developing world's capital markets become advanced, more Third worlders should make the grade.

Here's a link to an interesting BBC article on both.

By the way
The Nairobi Stock Exchange's Market Capitalisation(Value of all the shares listed on the exchange) is approximately Kshs 850 billion. Assuming 1US$ =Kshs 65, then the Market Capitalisation in US$ is 13 Billion.Motsepe's net worth is put at US$ 2.4Billion and Dangote's at US$ 5.5 Billion. do the math.

WOE, UNTO THE SILENT ONES

"In Germany, they came first for the Communists, And I didn’t speak up because I wasn’t a Communist;
And then they came for the trade unionists, And I didn’t speak up because I wasn’t a trade unionist;
And then they came for the Jews, And I didn’t speak up because I wasn’t a Jew;
And then . . . they came for me . . . And by that time there was no one left to speak up."

Martin Niemöller

Adolph Hitler didn't wake up one morning and round up Jews.He started the holocaust with a series of smaller 'arrests' and disappearances' of the 'undesirables' in the society and snowballed them into the killing of 6 million people.First,he targeted the mentally ill and handicapped for extermination.No body complained,after all who would miss them? Plus some were a burden to society.Then, he targeted the Jews.
After,the Jews were the liberals and opponents to his regime.
When Hitler started exterminating the enemies of his regime,these liberals hadn't complained.
Why? They thought that the extermination would never reach them.When it got to them there was no-one to save them.

Back to Kenya.As you see your neighbour's son evict somebody from another tribe.KNOW THIS' that man/boy is a criminal and once he's done with the family from another tribe,he is coming for yours'.Just as tribe is the excuse to kill,loot and rape, the man shall find another excuse to do the same to his fellow tribesman.

People in some parts of Western Kenya didn't know this but are now suffering at the hands of their fellow tribsemen.
Some MPs know this for instance, Cyrus Jirongo,Kabando wa Kabando,Noah Wekesa and Uhuru Kenyatta.That's why they are on the ground telling their constituents to keep the peace.

As the Bible says 'Can a man carry fire in his lap and not get burnt?'

The church
My faith in this institution is totally eroded.I hadn't known that most of the leaders are hypocrites.Before the election, churches rushed forward and took sides.Churches were competing in taking Advertising in the daily newspapers in support of either side.After the election,they kept quiet for a week, then joined the diplomats in issuing photocopy statements.The statements all said the same thing -dialogue and peace.
The irony is that most of the clash areas are very conservative with high church attendance numbers on Sunday's.
Why didn't church leaders come out on December 31st and urge their followers not to loot, burn or attack members of other tribes?

Why was the church quiet?
Small wonder, that the band of atheists keeps growing.

AS I SEE IT...SECURITY AND THE FUTURE

Today i will concentrate on our political rather than economic state.After all politics affects the economy.i.e. siasa mbaya ,maisha mbaya.My view of politicians is that they are all liars and opportunists.

I think the following facts are agreed upon by everyone across the political divide.

I-The December 27,2007 elections were flawed.

II-Both ODM and PNU areas had voting irregularities.Hence,it's a case of who cheated more rather than who didn't cheat.

III-A vote re-count or Presidential election run-off won't solve the current crisis.

IV- Not withstanding the furore over the elections Kibaki is the legally recognised President

Where are we?
At present the crisis has degenerated from a simple(As if u can call the loss of life simple), election dispute to a tribal conflict.The two main reasons as to why the crisis has degenerated are:

1) The Government has not handled the rioters' with an iron fist.
The USA made a similar mistake on 'liberating' Iraq.They declared all Baath Party members(Baath was like KANU in the 1980s,membership was mandatory for all) unwanted and stripped them of their jobs.Then,they overlooked looting and low level crime.Because,the USA did't want to appear like a heavy handed occupation force.Big mistake, the first edict immediately disbanded the internal security forces of Iraq and created an atmosphere of lawlessness.
The looters then graduated onto bigger crimes of robbery and kidnapping.The recently, jobless Baathists provided a recruitment ground for insurgents and criminal gangs.Iraq was then engulfed in secterian violence and crime for the next three years.The situation has only improved recently through a combination of US sponsored militia(the US had to arm some of its former enemies to fight al qaeda),an ammendment allowing Baathists to get their old jobs back and tough tactics from the US military.

In order, to maintain law and order we must crack down hard on any one blocking ROADS or DAMAGING any other infrastructure.Special courts ought to be set up to try and sentence such individuals quickly(say two weeks).

The military should be given the responsibility of keeping the northern corridor(Mombasa-Malaba)-Northern corridor road open.Military forces tend to perform well when given a specific task with clearly defined objectives.Then the Police and GSU can be tasked with civil disturbances away from the roads.

Once, the roads are clear the economy can hobble along while politicians take the next couple of weeks in negotiations.If the transport infrastructure isn't open, then more people will be laid off or won't be able to work adding to the number of idlers who can participate in riots and disturbances.


2)ODM started 'mass action' without an end-game
The party did nothing to control its supporters in the first two weeks of violence.Merely, blaming government restrictions on their political activities.The reaction in most ODM zones was spontaneous(to the best of my knowledge).however,the youth were awaiting further instructions from their leaders ODM leaders failed to go to their respective home turfs and talk to the youth.As a result the orange revolution was stolen by criminal elements.For instance,in Kisumu it degenerated into wanton looting and robbery.It has created an economic and security problem that will take the lakeside time a long time to recover from.Eldoret ,Naivasha and Nakuru are in a similar situation.

ODM is a tribal coalition, (so is PNU).If in doubt look at the criteria for picking Pentagon memebrs.However,the chaos has has degenerated into inter tribal fighting among some of the tribes in the coalition.How long the coalition will hold is another issue.For instance,what will happen when to the coalition when thugs from one coalition tribe rob another?Will the victims look at it as simple robbery or consider it tribal warfare?
Can you imagine what the situation would be if the Party split up?

The violence in the ODM areas is because the youth lack LEADERSHIP AND DIRECTION.ODM shouldn't think that its support is unassailable.Human nature is extremenly fickle.The youth who chased away 'foreigners' have started to attack locals.The longer the insecurity,school closures and disruption to trade persist in those areas, the more the erosion in the party's support.The average man will ask himself if it's worth it?

Does any one remember the opinion poll last year where Kenyan favoured Kalonzo Musyoka as our next President?

The future
The average Kenyan is more concerned with security and peace.However,the politicians are still trying to prove that their side won the elections.The insecurity is likely to cause more damage to the country than the failure to count votes properly.
The two protagonists may be sidelined by a THIRD FORCE as they argue over a non event(at present the Electoral results aren't the main issue) while the country burns.This is what Paul Kagame had in mind.The country seems rudderless on the political front.As they say 'POWER ABHORS A VACUUM'

My Plea
The Government should act tougher on security.without security the Government loses its legitmacy and the Economy is in the tank.The time to Act is NOW, before the inaction and National rot seeps into the security forces.Dont fear what people think,people love security more than civil liberties.Remember George Bush 9/11 and his new Anti-terror laws?

ODM leaders should stop issuing statements in Nairobi.Go back home talk to your constituents,Let the schools open in Nyanza and Rift Valley,fight the crime and resetlle the evicted.If the KCSE,KCPE registrations end without Nyanza and /Rift Valley schols opening,the cost to your supporters(Who are Kenyans like everybody else) will be too high.
If the planting season ends in Rift Valley without calm returning,then the country faces starvation in 2009 and the residents poverty regardless of who the President is.

Once,you lose the people's support the righteousness of your cause is immaterial ,no body cares.
Whether you are ODM or PNU the current crisis threatens the stability of the Government,opposition Party and most of all the country.


WARNING
The article above may not be to everybody's taste but I've tried to speak the truth(as i see it) without being partisan.I hope it doesn't offend anyone.If you are offended my apologies.

The Economy...Intangibles ......our stupidity

The economy is like faith. it is moved by factors that are not tangible.Hence, many developed economies around the world have Business Confidence indices i.e. the higher the business confidence, the better the economy's performance.

The current crisis will eventually subside.My guess is that by the end of March we will have a solution to the problem.However, whether that solution will be palatable to all, i don't know.You may NOT like the taste of Quinine but it can cure malaria.(get the drift?)

The lack of confidence means that even if normal business resumes in Eldoret,Nakuru,Kisumu and Mombasa and the displaced return, the local community won't make substantial investments in those areas.

For Kisumu, the likes of United Mall are unlikely to be built for a while.Uganda underwent a similar situation for about ten years after the end of the Bush war in 1986.For instance, the average Ugandan proffessional started building and buying houses from around year 2000.Over 10 years after the end of the war.

Once,peace is restored most people in Kenya won't be sure how long they can live before the next violent outbreak.Don't expect them to build 10 bedroom mansions or build retirement homes.Hence, expect the next Kenyan fad will be to have a second/third home in Dubai.UK and South Africa are ruled out beacsue the former has too mant taxes and the latter has Jacob Zuma and Power rationing.

The legal cost to business/economy.
Hernando De Soto's book 'The Mystery of Capital: Why Capitalism Triumphs in the West and Fails Everywhere Else.'said that it is because the poor in developing countries don't have property rights and cannot monetise/mortgage their assets(land) for capital.

The current crisis has made Title deeds void i.e. the fact that you have a title deed or lease certificate is useless as long as the locals in an area won't allow you to live or develop a certain area.Hence, you well tended 5 acre tea and dairy farm in the Rift Valley, can't get you a loan at the nearest Bank.

The losers in the current situation are:
Banks/Lenders
Do you think you can auction any land/houses pledged as security in Kisumu or Eldoret? If you do, then can you get a market price for it?

Society
Since, you can't got to court for legal redress or to the elders(there aren't any around), what do you do to solve your problem?You guessed right, a small proportion of people(the stupid ones) will take the law into their hands.

Court Process
In the current state,even if you obtained judgement against a debtor how do you enforce it or collect it? It is difficult to attach property in the current environment.As a result businesses will become more averse to granting Credit which is the KY Jelly that enables consumption in the economy.Less lubrication(read credit), less economic growth

PREDICTIONS
January's almost over,here are my belated observations on who,what and how 2008 will turnout. People The following individual will make the headlines:

Muthoni Wanyeki
She has come a long way from her FEMNET- gender activism days.She's just about to become a national face.I must admit back then i thought she was one of these overeducated Kenyans who tend to give overly complicated solutions.Time has proved me wrong.

Muthoni offers a fresh and sometimes unconventional way of analysing our collective problems as a nation and sugesting/implementing new solutions. For more about her bio await the Sunday Nation featurette.

Mutahi Ngunyi
Kenya's best political analyst.He has a fine grasp of the tactical and strategic political landscape.Uncannily accurate predictions that are sometimes years ahead of his peers(who specialise in pathetic,bombastic TV soundbites) He ought to have a blog. In 2008 Kenyans will pay more attention to his analysis given the current political climate.

Musalia Mudavadi
The perfect compromise candidate.In the struggle for a new political order,expect him to be nominated for some post.

Cyrus Jirongo Political survivor,you haven't heard the last of him.Expect him to challenge Musalia for their tribal leadership position.

Companies
Chinese car companies
All those Greatwall car brands wil push to be more recognisablea and be better known in the Kenyan market. Unfortunately, most of these cars are clones of better known models like Isuzu and Toyota

Forex Trading Companies
Royal, Genius and similar outfits are offering training on how to trade forex.They claim that the training will enable you to make huge profits from trading forex.The truth is that if it were that easy to trade`forex and make money, then Banks wouldn't spend money hiring forex traders(Treasury dealers) from each other.
They would just spend Ksh 30,000 or Ksh 75,000 train one of their tellers and voila make huge profits through him. This year the 'investors' may probably realise how 'useful' the training is.

A small proportion of the people taking the courses will make money.The vast majority 95% plus ,will never make money.

My advice- 'A fool and his money are soon parted'.

Society

Police Reservists
I expect them to make a return.The current political crisis is going to increase the levels of insecurity.To maintain security, the civillian populace in an area must be involved.Police reservists are one way of doing it.The reservists are members of the community who are trained and armed in order to assist in maintenace of law and order in an area.

NEW YEAR ,NEW PROBLEMS

Let's hope the year ends better than it started. I have been away for the holidays and work. My condolences to all of you who have lost friends, family, colleagues and property in the current political crisis.

Let’s hope we deal with the root causes of the crisis which are poverty, inequality and rabble rousing politicians who are the matchstick that lit our flame. South America, South Africa and Nigeria have the same problems as Kenya. However, the problems manifest themselves through kidnapping, armed insurgency and drug trafficking in South America. In Nigeria the crime and constant coups in the past. In South Africa via violent crime and xenophobia.

Aside from that I think this will be great year for the market. Why?

1. Inflation

It will be high in the current year. Generally inflation tends to erode the value of money. For instance, bread is now Ksh 35/loaf from Ksh 23 a year ago. You still get the same loaf (500gm) but you must spend more money i.e. Ksh 12 to get the same 500gm.

2. Real Estate slump

I don’t think the high end of the market will go anywhere soon. The current chaos will make wealthy Kenyans think of buying second, third or even fourth homes overseas. I see UK (If u can get around the tax implications for non-resident property owners), UAE, Tanzania and even Australia get some of this Kenyans.

3. Uncertainty creates opportunities

Opportunities are present in the current environment for the clever investor. There is only one rider 'YOU NEED CASH TO SEIZE THE OPPORTUNITIES'

Therefore, you must be in cash (but u will get whacked by inflation) or near cash situations.

That leaves only one place to place your money-Stocks.