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A Glance Back To Chart The Way Forward

A Glance Back To Chart The Way Forward

 

 

 

 

 

 

 

 

 

BY RITESH BAROT

Welcome to 2019! I wish the readers prosperity in great abundance.

In this article, I am certain you must be expecting a suggestion of a New Year resolution to invest, together with guidance on how to save and where to invest. Begin the year with personal budgets. Ensure you set aside an amount each month during the year 2019, for investment purposes. I begin by recommending that you should firstly plan to invest in yourself. Invest in progressively educating yourself and acquiring new skills, developing yourself personally or professionally, tapping into your creativity and appointing a life coach. Investing in yourself produces manifold results.

Now to the finance segment. During 2018, corporate governance issues were highlighted and have come to the fore in the market. Investors were quick to penalise a stock whenever enquiries were raised about questionable management practices. In 2018, NSE investors’ wealth fell by nearly 17% (paper value). This should not dishearten investors, especially those with a long term investment strategy. The NSE index is low and this is the right opportunity to purchase shares of certain high-yield blue chip listed companies.

During 2018, yields on the Kenyan Eurobonds increased by up to two percentage points towards end of year, as compared to the beginning of  the year. It indicated the country could pay higher rate of interest for borrowing commercially in the global markets. We are now aware of the upcoming third Eurobond, whereby the government is planning to borrow another Kshs 250 billion from the international market to help seal the budget deficit, despite many experts’ cautionary views about the country’s high debt levels. However, year 2019 looks promising.

In comparison to year 2017, when the country faced several headwinds including a drought situation and prolonged electioneering period amongst other factors, the Kenyan economy has grown during 2018.

Private sector activity expanded towards end of 2018 (especially the final quarter of the year), despite losing momentum from first half of the year. The agricultural sector has also benefitted from the recent short rains. Growth momentum will likely be sustained in 2019, as strong remittance inflows and a possibly controlled labour market will drive private consumption. There will be continued confidence and strong expansion in fixed investment. However, with regards to the banking sector (and economy in general), the maintenance of the interest rate cap will continue to limit the availability of credit and may restrict the government’s ability to secure further funding from the IMF. Nonetheless we are a very resilient economy.

Here are some important steps to assist in attaining financial success during year 2019: Establish financial goals, prepare a budget and adhere to it, get rid of your debts, begin saving now, seek professional guidance on realising your goals and review the progress on timely basis.

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