What wiil be the future of Colombo Stock Market?

Deva · 1 What wiil be the future of Colombo Stock Market? Fri Oct 14, 2011 3:16 pm

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Senior's view for following queries, would be very much appreciated as I am a novice of less than 1 years exposure @ CSE.
1. Will the market return to normalcy(healthiness) in near future?
2. What would be the reason for market's abnormal behavior even after the credit clearance?
3. Is there any tug-a-war situation between Brokers + Big time investors (including manipulators) versus regulators?
4. Does it give any signal of further collapsing (as I see, even the fundamentals are sinking at a very brisk rate) or kind of exit signal to genuine investors?

Roboticfx · 2 Re: What wiil be the future of Colombo Stock Market? Fri Oct 14, 2011 3:20 pm

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Please moderators or any other expert answer this post with good information with reasons and with a simplified language. It will be useful for all investors(as well as me) in this forum who have excited with the current market situation.

Smile

Investor99 · 3 Re: What wiil be the future of Colombo Stock Market? Fri Oct 14, 2011 3:33 pm

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In my opinion the downwards trend will continue still the end of this year. December is a month were there will be less activity at CSE, there will be profit taking by some fund managers and the remaining 25% of the credit need to be cleared by 31.12.2011. The world economy does not look favourable. Performance of the plantation companies are hampered by wage hike. Tourism outlook might not be positive as expected as Euro zone credit crisis continues. So because of these factors the down trend will continue in the CSE till the end of this year.

But because of the above factors most of the over prices counters would come down thus CSE might be attractive to foreign investors. This also provides a good opportunity for long term players to collect fundamentally sound counters. In my opinion there are some fundamentally strong counters which have already bottomed out.

But still the open issues like insider trading and price manipulations needs to be addressed by SEC or even if CSE becomes an attractive market foreign investors might shy away to markets like India China etc as they are regulated and provides good opportunities too.

worthiness · 4 Re: What wiil be the future of Colombo Stock Market? Fri Oct 14, 2011 4:10 pm

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My views are given below though I am not an expert.

1. Yes. Normalcy can be expected in mid of November. Markets are vulnerable where monopoly exist. I am expecting an announcement from authorities sooner than later.( Invisible & invincible hands are in uncontrollable situation).

2. Credit clearance only does not support investors who are looking for financing sources. My broker is reluctant to provide me even T+3 or T+5. No standard rule is in practice I believe. So Many are not in a position enter into market.

3. Compromise between brokers & HNWIs is must to run their business. There is a possibility of conflict between the CSE & HNWIs because of irregularities found in trading activities are being attended by the CSE.

4. I am not expecting a real collapse. It takes time to stimulate the market slowly. Genuine investors are the most affected. My shares have been in red almost 9 months with a loss over 25%.

Dear forum members please note that this is my personal view only.

rijayasooriya · 5 Re: What wiil be the future of Colombo Stock Market? Fri Oct 14, 2011 4:37 pm

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Anyway turn over is low which means open interest is declining.So there may be a good change in this bearish market.

Sudarshen · 6 Re: What wiil be the future of Colombo Stock Market? Fri Oct 14, 2011 5:12 pm

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This needs a collective effort, if all get disappointed then market will be surely get collapsed. I saw some had commented that even the tourism / hotel industry will not be improved even in the up coming season bcoz of collapse of European economy, Its a totally a wrong idea. Its unlikely to happen, all our hotel has been already booked for the season and some newly renovated resorts is going to be opened on coming weeks, specially John Keells hotels.
I can't understand why people such hurry to sell their shares with losses.

Dileepa · 7 Re: What wiil be the future of Colombo Stock Market? Fri Oct 14, 2011 7:31 pm

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Deva wrote:Senior's view for following queries, would be very much appreciated as I am a novice of less than 1 years exposure @ CSE.
1. Will the market return to normalcy(healthiness) in near future?
2. What would be the reason for market's abnormal behavior even after the credit clearance?
3. Is there any tug-a-war situation between Brokers + Big time investors (including manipulators) versus regulators?
4. Does it give any signal of further collapsing (as I see, even the fundamentals are sinking at a very brisk rate) or kind of exit signal to genuine investors?

In my opinion,
1. Will the market return to normalcy(healthiness) in near future?
Market is already returning to normal. The problem is market was above normal during the past 6 months or so.
During the war time ASI was well below 3000 mark. Due to the sudden economic boom after the was it almost touched 8000 level.
If you think about it, CSE simply can't keep up at that level. I believe ASI will eventually stabilize at around 6800 level.
Sudden jump from 3000 to 6000 level could be justified as the gain of peace. But above 7000 is just speculation.
Of course there will be an annual gain due to ongoing development process, but there won't be big gains like 90~100% as there was in 2009~2010.

2. What would be the reason for market's abnormal behavior even after the credit clearance?
This credit thing only effect to retail investors and the market wasn't actually surviving on credit.
Thing is foreign investors are not willing to invest, on the basis that CSE is already over valued and SL is not stable enough yet.
Also European credit crisis is keeping them away from making risky decisions. (they need their money to get rid of the situation at first)

3. Is there any tug-a-war situation between Brokers + Big time investors (including manipulators) versus regulators?
No problems with brokers and investors. Actually they are best friends.
Problem is with SEC and manipulators(+ their brokers). I think SEC is doing a magnificent job there to protect small investors.
SEC knows that this market need small investors, specially during the periods like this where foreigners are leaving.

4. Does it give any signal of further collapsing (as I see, even the fundamentals are sinking at a very brisk rate) or kind of exit signal to genuine investors?
It may go little more on the down side due to lack of large institutional investors. But you are wrong about fundamentals.
Genuine investors are collecting fundamentals. For example, we saw foreigners buying JKH during this week.
If you go through market time and sales today, there wasn't a single sell order for GLASS. All of them were BUY.
And look at peoples leasing IPO. They are promoting it in overseas. That is a very good sign.
I believe market will recover properly in Feb-March 2012, with the blue chips going up and not with the junks.

aya · 8 Re: What wiil be the future of Colombo Stock Market? Fri Oct 14, 2011 8:51 pm

aya

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"If you go through market time and sales today, there wasn't a single sell order for GLASS. All of them were BUY"

I really dont get your point here.... There total no of shares traded were 1685600 and The total SELL No of shares were 1565000 and BUY No of shares were 120,600.... There was very little BUY and 93% of the txn were SELL...

What are you trying to explain here???

Aamiable · 9 Re: What wiil be the future of Colombo Stock Market? Fri Oct 14, 2011 9:12 pm

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No comments.

Academic · 10 Re: What wiil be the future of Colombo Stock Market? Fri Oct 14, 2011 9:41 pm

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Read my posts in following threads, you may understand.

http://forum.srilankaequity.com/t5149p20-massive-forced-selling-by-margin-traders
http://forum.srilankaequity.com/t6933-is-asi-heading-to-6500-level
http://forum.srilankaequity.com/t10360p25-disaster-is-around-the-corner

xmart · 11 Re: What wiil be the future of Colombo Stock Market? Fri Oct 14, 2011 9:47 pm

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Aamiable wrote:No comments.

mhh. theories are vanishing when blood on the street. we can make our minds up thinking this is still not worst than great collapse. BTW, why we should be worry if companies are doing well. ultimately shares will reflect its collective performances. hope so!

Genting · 12 Re: What wiil be the future of Colombo Stock Market? Sat Oct 15, 2011 7:36 am

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Current PER of the market is 16.8.
With Q3 results this may become 13-14.
Globally almost all markets are preforming well - DOW gained 1000 (~10%) points during last two weeks.
Macro economic conditions are doing well

Overall image - Current level of CSE is very attractive

Only adverse factor i see is PLC 7Bn ipo. Out of that 7 Bn, at least 3Bn may come from current CSE investors. If those investors don't bring new money, they have to raise cash by selling their stocks. That may bring down the market.

How ever, I think CSE may bottom out within coming two weeks.

Investor99