Why were global markets so turbulent last week?
Summary
TLDRIn this interview, Andrew Bon, CEO of Kenyon Wall Street, discusses the chaotic global markets with Ronnie Choka, a senior research analyst at AAB AIS Africa. They delve into the impacts of decisions by central banks like the Fed and the Bank of Japan on markets and economies worldwide. The conversation highlights the challenges of inflation, unemployment, and the potential for rate cuts, with a focus on how these global trends could affect Kenya's financial landscape and investment strategies.
Takeaways
- 🌐 Global markets are experiencing high volatility, with major markets from Japan to New York to Germany showing significant declines.
- 📉 The Federal Reserve's decision to retain the benchmark rate has defied expectations of a rate cut, causing bond yields, especially on long-term US treasuries, to decrease.
- 🇬🇧 The Bank of England followed the European Central Bank's lead by lowering their benchmark rate, while the Bank of Japan made a historic move by raising interest rates to combat inflation.
- 📈 The US jobs report came in lower than expected, signaling potential economic slowdown and increasing the likelihood of a recession.
- 🇺🇲 The narrative of a soft landing for the US economy seems elusive, with the Federal Reserve missing the opportunity to lower rates, which could have significant implications for unemployment and business.
- 🇰🇪 The global economic situation impacts Kenya, with local markets seeing accelerated sell-offs and the Kenyan Shilling experiencing fluctuations.
- 📊 Inflation in Kenya is below the midpoint target, suggesting a potential for the Central Bank of Kenya (CBK) to lower rates, which could stimulate economic growth and reduce unemployment.
- 🏦 A potential rate cut by CBK could make borrowing more affordable for businesses and households, potentially leading to increased consumption and investment.
- 💼 The Kenyan government's debt sustainability outlook is stable, with efforts to manage debt positions and reduce the cost of debt through refinancing.
- 📈 The Kenyan Shilling has been one of the world's best-performing currencies, which could be further strengthened by rate cuts in other major economies.
- 📉 Investor strategies should adjust to the current market volatility, focusing on selective diversification and favoring sectors that show growth potential, such as banking and telecommunications.
Q & A
What is the current state of global markets according to the discussion?
-The global markets are experiencing high volatility, with many regions including Japan, New York, and Germany seeing significant downturns. This is attributed to various factors such as decisions from central banks and economic indicators like unemployment rates and inflation.
What was the recent decision by the US Federal Reserve that impacted markets?
-The US Federal Reserve decided to retain the benchmark rate, which went against market expectations of a rate cut in August. This decision led to a drop in bond yields, especially on long-term US treasuries.
How did the Bank of England respond to the Federal Reserve's decision?
-The Bank of England followed the European Central Bank's lead by lowering their benchmark rate by 25 basis points, which was part of a broader trend of central banks adjusting rates in response to economic conditions.
What was the Bank of Japan's decision regarding interest rates and why was it significant?
-The Bank of Japan decided to raise interest rates to combat inflationary pressures and exercise some yen control. This move was significant as it was almost unprecedented, given that Japan had maintained near-zero benchmark rates for the past 17 years.
How do carry trades influence global fund managers' investment strategies?
-Carry trades involve borrowing in yen to invest in other non-yen assets such as US treasuries, equities, and European equities. The Bank of Japan's decision to raise interest rates affected these strategies, leading to market sell-offs and adjustments in investment approaches.
What economic indicators are signaling a potential recession in the US?
-The US jobs report came in lower than expected, and unemployment numbers are starting to rise, which could signal that the US economy is entering a recession. The narrative of a soft landing appears to be elusive.
What is the impact of global market conditions on Kenya's economy?
-Given the interconnectedness of the global economy, decisions by central banks have material effects on emerging and frontier markets like Kenya. This includes impacts on Kenya's blue-chip stocks, currency exchange rates, and overall market stability.
What are the expectations for the Central Bank of Kenya's upcoming meeting?
-The Central Bank of Kenya may consider lowering the benchmark rate, given the recent global economic trends and the need to stimulate the economy. However, they may also adopt a wait-and-see approach due to the current market uncertainty.
How would a rate cut by the Central Bank of Kenya affect the common man?
-A rate cut would enable banks to lower their lending rates, making borrowing more affordable for businesses and households. This could stimulate consumption and investment, potentially leading to economic growth and a decrease in unemployment.
What is the current state of government debt in Kenya and its implications?
-Kenya's government debt is a concern, with the country spending over 70% of its revenue on servicing debt. Any decision by the Central Bank of Kenya to cut rates could make it more affordable for the government to manage its debt.
What investment strategy does the guest recommend for clients in the current volatile market?
-The guest recommends selective diversification, focusing on breakaway growth sectors while reducing exposure to underperforming sectors. This approach aims to protect and potentially grow investments amidst market volatility.
Outlines
📉 Global Market Turmoil and Its Impact
Andrew Bon, CEO of Kenyon Wall Street, interviews Ronnie Chok, a senior research analyst at AAB AIS Africa, to discuss the chaotic global markets. They cover the unexpected decision by the US Federal Reserve to retain the benchmark rate, defying rate cut expectations, and the consequent market volatility. The conversation delves into the actions of other central banks, including the Bank of England and the European Central Bank, and the unprecedented move by the Bank of Japan to raise interest rates after 17 years of near-zero levels, affecting global fund managers' carry trades. The US job report's adverse figures and the implications for businesses and consumers are also discussed, hinting at a possible recession.
🌐 Effects on Kenya and Central Bank Decisions
The discussion shifts to the implications of global financial decisions on Kenya, with Chok explaining how interconnected economies and capital mobility affect local markets. He notes the sell-offs in Kenyan blue-chip stocks and the impact of yen movements on equity markets. Chok anticipates the Central Bank of Kenya (CBK) might adopt a 'wait and see' approach due to market uncertainty, despite the potential for rate cuts influenced by global economic trends. The conversation also touches on the stability of the Kenyan shilling and its performance compared to other currencies.
💼 Impact of Interest Rate Cuts on the Common Man and Government Debt
Chok outlines the potential effects of a Central Bank of Kenya interest rate cut on the common man, including lower lending rates, stimulated consumption, investment activity, and a possible decrease in unemployment. He also discusses the impact on government debt, suggesting that lower rates could make it more affordable for the government to service its debt, which currently consumes a significant portion of tax revenues. The conversation highlights the challenges of balancing debt sustainability with the need for economic stimulus.
📈 Medium to Long-Term Outlook for the Kenyan Economy
The conversation explores the medium to long-term outlook for Kenya's economy, focusing on debt sustainability and the government's management of its debt position. Chok mentions the government's successful debt refinancing and the decline in net domestic borrowing targets, despite the need to raise them due to the shelving of finance bills. He also expresses concern over the high subscription rates for short-term T-bills, suggesting a market preference for short-term investments over long-term ones, which could indicate risk aversion among investors.
🚀 Investment Strategies Amidst Global Volatility
Chok advises on investment strategies in the face of increased market volatility, emphasizing the need for selective diversification and a focus on breakaway growth sectors while reducing exposure to underperforming ones. He points out the banking and telecommunications sectors as areas of interest, with specific mention of Safaricom as an undervalued stock. The advice is based on the expectation of a shift in market conditions, including potential rate cuts and the subsequent reallocation of investment portfolios.
🌟 Selective Diversification and Sector Performance
The final paragraph discusses the importance of selective diversification, where investors are encouraged to focus on sectors that are performing well, such as banking and telecommunications, while avoiding those that are underperforming, like media and manufacturing. Chok provides specific examples of companies within these sectors and their recent financial performance, suggesting that investors should consider the current business cycle and potential market shifts when making investment decisions.
Mindmap
Keywords
💡Kenyon Wall Street
💡Macroeconomics
💡Equities
💡Fixed Income Analysis
💡Volatility
💡Federal Reserve (Fed)
💡Interest Rates
💡Inflation
💡Unemployment
💡Carry Trades
💡Recession
💡Central Bank of Kenya (CBK)
💡Debt Sustainability
💡Infrastructure Bonds
💡Portfolio Rebalancing
Highlights
Andrew Bon, CEO of Kenyon Wall Street, discusses the chaotic global markets with Ronnie Choka, a senior research analyst.
Ronnie Choka provides an overview of his role covering macroeconomics, equities, and fixed income analysis in East African Financial Services.
Global markets are volatile due to recent decisions by central banks, impacting long-term bond yields and challenging market expectations.
The Bank of England and the European Central Bank have lowered their benchmark rates, influencing market direction and expectations.
Bank of Japan's decision to raise interest rates is unprecedented, affecting carry trades and causing market sell-offs in US markets.
US job reports are lower than expected, signaling a potential recession and increased unemployment.
The Federal Reserve's decision not to lower rates contrasts with market expectations, adding to the uncertainty.
Markets are pricing in a 60% probability of an emergency rate cut by the Federal Reserve.
Central banks face a dilemma between managing inflation and unemployment, with the US Fed in a challenging position.
The impact of global market decisions on Kenya is significant due to the interconnectedness of the global economy.
Kenya's central bank, CBK, is expected to maintain a wait-and-see approach given the current market uncertainty.
A potential rate cut by CBK could stimulate consumption and investment, positively impacting the common man.
Government debt sustainability is a concern, especially with the country spending a significant portion of its revenue on debt servicing.
Ronnie Choka advises clients on investment strategies in a volatile market, emphasizing selective diversification.
The banking and Telco sectors are highlighted as areas of opportunity for investment in Kenya.
The Federal Reserve's global impact is underscored, with its decisions affecting markets worldwide.
Ronnie Choka's investment advice includes a focus on breakaway growth sectors and caution towards underperforming ones.
Transcripts
[Music]
good afternoon my name is Andrew Bon the
CEO of the Kenyon Wall Street I have a
very special guest here today this is
only Tuesday when we're recording this
and markets are already super chaotic
this week so we've brought a special
guest to help us understand what's going
on so Ronnie thank you for joining us
thank you so much Andrew so please uh
for our viewers who don't know who you
are could you introduce yourself briefly
all right what you do my name is Ronnie
choka I'm a senior research analyst at
aab AIS Africa my scope of coverage
ranges from macroeconomics equities and
fixed income analysis across the East
African Financial Services industry ah
perfect well thank you so much again
Ronnie for joining us thank
you man what is going on in global
markets like uhhuh it has been
it's chaotic everything from Japan to
New York to Germany everywhere is in the
red this week so I guess my first
question is from a macroeconomic Global
Perspective what is going on right now
in global
markets uh great uh where do we start I
think uh the global markets have been
volatile over the past two weeks of
counting uh starting over the US uh the
the latest fed meeting uh opting to
retain The Benchmark
rate uh defying expectations of the
First Rate cut coming uh in August so
markets have opted to defy the
expectations and that what has that that
what that has meant it is that we've
seen bond yields especially on longterm
10e and even 2-year us treasuries the
yields have started coming down yeah uh
the latest uh key fed decision was by
the bank of England where they opted to
lower their Benchmark rate by 25 basis
points following in the footsteps of the
European Central Bank uh just a month
earlier and I think uh that enshrines uh
the
direction uh that yields are generally
expected to take on especially by key uh
key markets yeah but that has also come
at a time when if you look over in Asia
uh the bank of Japan elected to raise
interest
rates uh in a it of course to uh stem
the inflationary pressures that are
rising in the market and also to exer
some y c control okay they also elected
to have their bond
purchases so that that has meant uh on a
global markets uh
context just to put into context one we
know that in Japan they've kept their
Benchmark rates at near zero levels over
the past 17 years and that uh allowed
Global fund managers to exercise what we
call carry trades which is essentially
uh borrowing in yen to go and invest in
other nonen assets us treasuries us
equities uh European equities as well
and even Japanese
equities uh so that has been going on
over the past 17 years so the move by uh
Bank of Japan to raise interest rates
was almost unprecedented historic
historic let me put it it was momentous
for markets and it almost threw markets
in in a frantic yeah uh we started to
see risk of sell-offs in US markets uh
it did not help either that the US jobs
report came in adversely or lower than
expected yeah ific L lower and with jobs
reports especially in the US they almost
always are revised to down a week later
but they do that quietly you know they
don't tell the world they were revising
down yeah but it's worse than probably
what they're saying right now exactly
cuz uh over the past uh 20 more than 24
months and running Benchmark rates in
the US have been uh at at at at very
elevated levels and that has wrought a
lot of pressure for businesses consumers
already the fisc the fiscal buffers that
the government extended to CI US
citizens are almost uh dissipating from
the economy yeah and now the material
effects you're starting to witness is
that uh unemployment numbers are
starting to tick up signaling that uh
perhaps the US economy is entering the
much feared recession mhm so the the The
Narrative of the soft Landing appears
almost elusive yeah if at all uh fed
does not convene uh soon enough okay to
uh make the appropriate decision which
is to lower rates at this point yeah and
what Jerome pal missed the opportunity
to lower rates last week yeah uh but you
know when you see like in the US there's
always emergency rate cuts that they can
do do you think they may if if this
continues if we continue in the red for
2 weeks that they may consider an
emergency rate cut uh yes markets are
pricing in a 60% probability that the
FED may meet intra period to lower rates
and this is occasioned by of course the
red data we getting uh especially in the
pointing out to the recession that
they've been failing all along you know
yeah and you know since monetary policy
tends to have their lugs M so meaning
that even if the FED were to lower rates
abruptly even by 1 percentage point
point it would necessarily translate or
trickle down to an up a downtrend in
unemployment yeah it will take a while
so we almost now in the muddy Zone yeah
it's in it's in a weird spot because
central banks often deal with correct me
if I'm wrong two issues primarily yes
inflation and unemployment
precisely the US fed is in a weird
position mhm where now it has high
inflation and high unemployment yes so
you know and the economic War chest that
they have doesn't exactly align they
can't just print money yeah I mean well
the US can just print money but uh you
know there's the inflation cost to that
and such so you know I guess my next
question though is we're we're talking
about global markets usfed Japan Germany
UK why why does this matter for Kenya
how does it impact Kenya uh it's a great
question uh cuz given the
interconnectedness of the global economy
at this point and the free mobility of
capital across jurisdictions m key
Decisions by central banks have material
and traceable effects to emerging and
Frontier markets such as Kenya such as
where we sit uh even if you look at some
of the trading action on our Blue Chips
we've witnessed uh accelerated sell-offs
over the past uh 2 days yeah what do we
see total yesterday was a a good Loser
yeah total I mean even the trading board
right here can see uh we go a lot of
Blue Chips closing in the red see a lot
of red yeah that gives you the
impression of the market the blue chips
are really Under Pressure mhm uh but at
least we're starting to see some
stability but we don't know whether we
we at the Comfort Zone yet yeah given
even the Yen has held up compared to
yesterday yesterday the Yen shed more
than 3.5% in a day M we usually move in
basis points but 3 percentage points is
a huge stretch yeah yeah so uh we can
trace that uh impact of of course the
Yen movements and the Panic sell-offs
that we saw on equities across developed
and developing economies and at the same
time we've also seen bond yields begin
to decline meaning bond prices are
rising
so markets are warming up to the
prospects of uh rate Cuts in the
coming um however for equities it's it's
it's gloomy uh for now uh markets are
interpreting bad news as bad news yeah
yeah okay interesting now what do we
have cbk tomorrow has its meeting 9:00
a.m. what are your expectations for
that um
in context of the recent developments uh
we know that inflation came in uh 4.3%
which is significantly below the
midpoint Target of 5% mhm uh so that
gives us the trend that inflation is
heading in the right direction yeah uh
we're starting to see increasing
prospects of uh key fed Fed rate Cuts
over over the coming months so that that
can that widens the wiggle room for the
central bank to lower rates to lower the
Benchmark rate at least or even at least
just one uh Insurance cut yeah before
the end of the year okay as as as as as
a signal
or as a message to the markets that you
know we want
to help the economy take off from this
lumy Zone we're in yeah if you look at
private sector credit growth numbers is
coming in at single digit 6.3% as of
April which is very low we should be in
the double digit territory on the
minimum uh so I think at the present
time however I think the central bank
will tend to nudge towards a wait and
see approach okay given the uncertainty
looming in the markets I don't think
they would want to act too too soon mhm
uh probably wait for the market angst to
settle a little bit before making a
sober decision cuz price stability
objective is dual fold yeah uh there's
intern price stability and external
price stability which is the exchange
rate mhm uh for one we know that uh the
central bank has been on a strategy of
raising real yields to sort of anchor
the Shilling and we've seen the Shilling
has now taken on a stable
footing but it's it's done quite well
this year what the world's best
performing currency yeah one of the best
so far cuz what we came from close to 16
5 around January 25th precisely to I
think I I transferred my rent money
today and it came out to like
1295 129. yes exactly so but I know what
last week we had a blip we had a blip
toward I think Wednesday or Thursday
where we got up till almost
133 and and in these numbers I guess
it's important for viewers to know that
uh we're talking about USD Shilling yes
rates um
that well that's typically the one
people use
[Music]
anyways but uh okay now I think it's
important to
understand
why I mean how do how does how if cbk
were to
cut what does that mean you know for the
Common Man how does that change their
life all right um if I told the Central
Bank of Kenya were to cut interest rates
uh tomorrow
that would mean it would open the room
for banks to lower their lending rates
MH to businesses households they'll be
able to borrow more at a a more
affordable cost M uh it would certainly
stimulate a sense of consumption and
investment activity yeah um we would
start to see even that reflect in the uh
leading growth economic growth
indicators um further to that
we would also notice a downtrend in
unemployment numbers more businesses
will be able to expand their activities
hire more stuff to or even increase
their wages to uh you know uh expand
their uh operations as as it were so
that that decision definitely has
significant implications for the common
man
yeah uh it would also uh now because
that's also pending the decisions by
other uh central banks it would also
help give the Shilling a more stable
footing if at all even the US market say
they decide to lower their Benchmark
rates yeah it would drive further
strength in the Kenya Shilling okay and
in ter you know there's a lot of
conversations going on now about
government debt exactly and such so
correct me if I'm wrong I think I'm
correct but uh if we were to you know
hypothetically if cbk were to drop rates
does wouldn't that make it more
affordable for the government to pay off
debt I I think you're very spoton cuz
yes the weighted average cost of debt is
a direct function
of uh The Benchmark rate mhm uh if at
all the Benchmark rate is so elevated it
reflects even in the yield curve mhm
that means the cost at which the
government is borrowing from the private
sector is in the high teenss as it
currently is that in itself raises the
what we call the interest expense to tax
revenue ratio
okay if at all tax revenues aren't
Rising as fast as interest rates are mhm
then that's uh it presents a threat to
debt
sustainability okay and that's a big
conversation going on right now because
what we're we're currently awaiting a
high court DEC de ision on finance bill
23 finance bill 24 has been scrapped so
seems many of the Reven new Revenue
generating models uh are disappearing at
least for the government side so if you
were you know the president or sitting
in in that seat you know
that that's not super
encouraging because we all know the
budgets have been increasing yes uh you
you know and with the increase in debt
and I think currently the country spends
over 70% of the money it collects just
on
debt so that's a little worrying to me
what do what do you think in terms of
like I guess the medium to longterm
outlook of the overall Kenyan economy
you know take for example if I'm buying
a 5-year uh Bond
what should I understand about the
economy right now all right um if you
talk about the medium-term Deb
sustainability outlook for Kenya yeah uh
I think the government has really done a
fairly good job over the past year to
allay debt refinancing risks okay that
is to say the ability of the government
to manage its uh debt position mhm has
fairly improved over the past year case
in point we know this year we had um a
Euro bond that was due to be refin to be
paid in June 2024 it's been paid right
it was paid 4 months in advance
partially and then the remaining portion
was cleared off in
June and the refinancing option came
with an amortized plan that is to say we
don't have
significant bullet debt obligations uh
due Over the near-term Horizon so that
presents a stable fairly stable outlook
for our even our balance of payments
accounts because we don't have large
draw Downs at a single
go domestically uh what we've witnessed
is that uh the weighted average cost of
debt has been on the rise
undoubtedly uh yet at the same time if
we look at the domestic net domestic
borrowing targets M that has been
declining over the past two fiscal years
however for this fiscal year following
the shelving of the finance bill the
government had to raise its net domestic
borrowing targets to compensate for the
projected decline in revenues yeah yeah
but you know what's worrying me about
that now is you know the short-term T
bills yes you know so last week I
actually got really worried last week's
auction uh CU as we were discussing
before the interview started 91 day over
subscribed 91 day looks good the 182 and
364 not looking too hot I know even the
that that one year uh term was like less
just less than 11%
subscribed uh what what does that
tell what what should I understand about
that
okay I think activity in the t- bill
Market is reflective of the overall
duration Market even the longer term 2E
and 20 year
duration that is to say activity has
been largely concentrated on the
shortterm papers the 91 day T bill which
is reflective of the market sentiment
that uh based on the the perceived risk
sentiment in the in prevailing we'd
rather invest shortterm mhm than
longterm okay or if I told you to go
longterm you have to make the interest
attractive the return needs to be as
attractive for me to take up that risk
right yes so that's the sort of
interpretation at play uh that's driving
that uh demand to be skewed towards a
short end okay rather than the long
end but never you know one week in
itself is a fairly small sample to you
know compare conclusively that indeed
demand is skilled on the short
end uh we also need to look at it in the
context of activity in the bond market
the longer term uh duration bonds where
if you look at uh as we speak where the
government floated um an infrastructure
Bond actually two infrastructure bonds
which are currently still on auction MH
and the returns based being uh offered
there are in the High Teens High 17s to
uh there's another one with 14.39%
uh given the the it's a fairly low
threshold of 40 billion they're looking
for and uh bonds are very attractive
they're taxfree to to that mhm yeah so
we expect action to be skewed towards
the bond market with the results coming
in uh next week okay interesting
interesting and right now with
everything not only going on locally but
internationally what are the
main maybe news topics or announcements
you're you're looking out for for the
rest of the week that would help guide
you know an investment
decision great um for one I'm really
looking forward to tomorrow's Central
Bank Red
deis I'm also keen on uh the US fed
especially the decision they'll make on
rates yeah I anticipate they will make a
uh impromtu meeting maybe towards the
end of this month okay but it' probably
only be like 25 basis points right yeah
but even if it's 25 basis points it's a
signal to the market that now rates are
headed lower so even the portfolio
rebalancing will be skewed now away from
cash and near cash assets back into
equities you'll start seeing a divers of
flows away from fixed income assets back
into the equities Market not only in
develop markets but even in emerging and
Frontiers such as where we sit mhm so
that would be a moment momentous
decision in as much as yes the bo ECB
have done it I think the the the the
turn in the needle would be now the US
fed making yeah yeah the decision to
lower the rates okay yeah yeah and as
you had mentioned earlier you know I
think it's also important to note that
people really don't understand how
impactful the Federal Reserve is
globally yeah like you may think ah it's
it's Washington DC no one no one cares
and stuff but like that being that the
US dollar is still the world Reserve
currency for now
uh that decision has a huge impact on
global markets and many countries many
corporates they all base everything they
do off that US dollar so yeah I just
wanted to mention that because I think
you know even some of our viewers may
not understand just how impactful
Federal Reserve is to every corner of
the world but that also means if the US
market crashes mhm you you may feel it
at home too absolutely I couldn't agree
the more yeah uh certainly the decisions
by key central banks such as the US fed
Bank of England European Central Bank
have material implications for Capital
markets MH and the response time is
almost instantaneous yeah from the time
the FED makes the the decision you
almost see flows tilting in
instantaneously even currency
differentials start adjusting almost in
tune MH with a decision yeah okay
interesting interesting now my last
question for you
m I already asked you what you're
watching this week you said the fed and
cbk decisions yes uh you know what what
is your outlook going on right now for
your clients you know you're you said
director of research so how are you
advising clients how are you advising
your people maybe even your employees on
what is taking place currently and how
they should make moves to I guess either
protect themselves from it or compensate
for it all right at the start of the
year we launched our 2024 investment
plan and one of the key themes we
highlighted the report that we've
anticipated will shape the year was that
we expected uh we perceive that we
entering a new regime of higher Market
volatility across and within asset
classes and true to it we've seen over
the past two quarters uh increased
volatility and dispersion of returns in
the equity space and also a lot of
disturbance on the fixed income side
okay yeah and what that means uh in such
a
volatile kind of
Market uh even investment strategies
have
to adjust that is to say now the typical
Buy and Hold
strategy uh in a regime where there's a
lot of volatility where the Kenya stock
market moved from the worst stock market
to the best stock market in dollar a lot
of volatility in one quarter that's a
lot of volatility so our recommendations
to our clients was that one uh investors
need
to adjust their portfolios tilting
exposure towards Breakaway growth
sectors while reducing exposures to
underperforming sectors so sector
diversification yes but selective
diversification okay yeah in as much as
yes we want we want exposures to all
sectors there's increasingly low
tolerance to underperforming sectors
yeah that means we have to shake off or
uh you know reduce at least take like
media for example the media industry the
Blue Chip media you know nmg standard
haven't been doing too hot in the market
they've been loss making over the past
fiscal year yeah and if you look at
manufacturing counters they've really
been uh countering headwinds from the
high inflation um elevated interest
rates low consumer demand
notus announced voluntary liquidation
today needless to say yeah and to add to
that uh we know now there are other
sectors that were really performing very
well the banking sector uh really uh to
to start with recording unprecedented
profitability levels over last year and
even spilling over into this year mhm so
uh even our recommend investment
recommendations you'll find they have a
bias towards the banking sector and a
little bit also towards the Telco sector
which
we think uh Safar in particular uh has
been quite quite undervalued and it's
actually a good uh moment to back up on
the stock given that we are at a turning
point of the business cycle if rates
coming down and flows coming back to
equities okay yeah interesting well I
think that's really good advice for
people to take so you said selective
diversification
diversification all right well thank you
so much for joining us thank you for
helping us
understand what is going on in the
global markets right now but we
appreciate it much obliged all
right thank you
[Music]
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