Tuesday, February 05, 2013

What matters in 2013


What matters in 2013



It feels strange making 2013 predictions in the middle of February 2013.However, I need to stick my neck out and see how they pan out.


1. Constitution will be amended
They are many reasons and excuses why we will do this:


-Cost: we haven’t doubled our tax revenues or tax bases but our fiscal expenditure has increased tremendously.


-Federal vs State issues: In all Federal Governance systems there’s always a push and pull between the centre and the federal regions. If we get significant oil or gold deposits I see the centre re-asserting itself.


-Fine tuning the constitution. Just like a car engine needs regular servicing so do constitutions.

The issues between the Inspector General of Police and the National Police Service commission point to the probable need for an amendment. As the new constitutional offices come on stream more areas  for amendment will appear.


2. Real estate

2013 will be the year real estate will stop looking like a one sided bet-any real estate you buy doubles in 12 months. I think taxes on idle land and probably Capital Gains tax is on the way within 3-5 years whether Jubilee or Cord wins. I’ll do a post on real estate soon.


3. Geopolitics and Terrorism

Kenya is a frontline state in the global war on terror. The recent French action in Mali mirrors Kenya’s entry into Somalia. Given our victory in the Somalia offensive, Al-shabab and their sympathizers will be looking for a comeback. Hence, terrorism threats will remain a clear and present matter.


4. Stock Market

NSE has rallied by over 30% in 2012 but it is still cheaper than it was at its last peak. Foreigners are busy picking counters. Local retailers will come to buy at the top. The big news isn’t the rally. It is the GEMS segment of the market. It allows firms to list with less strict requirements than the main NSE.It will likely attract many mineral exploration firms who are fundraising and aim to meet the 35% local ownership requirement.

If we do strike Oil, Gas or Gold this segment will explode.



5. Apple no longer cool

Apple is going down the BlackBerry road that is when everyone holds up a half bitten fruit, that gadget is no longer special. Buyers start interrogating the premium. The Sony Xperia Z may start a trend of shockproof, waterproof Smartphones. Apple is now playing catch-up. Take a look at the ipad mini to fight 7 inch android tabs and the increase in Iphone 5 screen size over the Iphone 4S.


Apple Commoditization: the bi-annual release cycle for Ipads makes them less special. Consumers will wonder why they have to pay a premium for a product that is obsolete in 6 months. It will be a replay of the PC industry when Pentium I was superseded by Pentium II then Pentium III before consumers realized they didn’t need all that horsepower for email and word processing.

No comments: