would enable you to enjoy an array of other services such as Member Rankings, User Groups, Own Posts & Profile, Exclusive Research, Live Chat Box etc.. 
Home
Even though the Colombo Stock Exchange's benchmark index broke its previous all time high record yesterday, analysts are on a cautious note saying that investors should pay less attention on the broader index or PERs but the intrinsic values of the shares.
"Investors should pay less attention to the index and PERs of questionable accuracy which are biased towards a few heavyweight companies, some of which have very low share free floats" C T Capital chief executive Channa Amaratunga said.
Colombo Stock Exchange's benchmark All Share Index (ASI) yesterday broke its previous all time record of 7147 points in October 1, 2010, closing at 7193.1 points.
"Despite the sharp gains in the broader market and headwinds in the form of rising inflation and flurry of Initial Public Offerings, value still exists for those who are willing to do their homework" Amaratunga added, reiterating the need to be focused on fundamentals.
Head of the local market research firm, Frontier Research's Amal Sanderatne said that is almost impossible to comment on the near term performance of the market solely based on the present upward trend.
"The situation is very complex. I think on a three year horizon. Within three years time the returns from the capital market will be less than the risk free rate" Sanderatne noted.
Another analyst commenting on the yesterday's development in the country's capital market said that the risk loving retailers seem to be dominating the market once again.
"The retailer favorites in the likes of GREG, LGL and PAP have been the hot picks of these 'investors'. These are forewarning signs of a catastrophe and we need to learn lessons from our not too distant neighbour - the Dhaka Stock Exchange. Fundamentally strong stocks have seldom seen investor favour lately" he said. However according to the chief executive of the Ceybank Asset Management, Chirtra Sathkumara, this upward trend is backed by fundamentals and the reason for the indices to go up is expected corporate earnings.
"Earlier everyone said that the shares are overvalued based on historical values. But now with the expected earning the PE ratios will be around 19 times as opposed to earlier 28 times. So I think this upward trend will continue and it is backed by fundamentals"
He also said that there are signs for foreign investors to come back and invest in the country's stock market as most of the European have more or less recovered from the economic crisis.
"Investors should pay less attention to the index and PERs of questionable accuracy which are biased towards a few heavyweight companies, some of which have very low share free floats" C T Capital chief executive Channa Amaratunga said.
Colombo Stock Exchange's benchmark All Share Index (ASI) yesterday broke its previous all time record of 7147 points in October 1, 2010, closing at 7193.1 points.
"Despite the sharp gains in the broader market and headwinds in the form of rising inflation and flurry of Initial Public Offerings, value still exists for those who are willing to do their homework" Amaratunga added, reiterating the need to be focused on fundamentals.
Head of the local market research firm, Frontier Research's Amal Sanderatne said that is almost impossible to comment on the near term performance of the market solely based on the present upward trend.
"The situation is very complex. I think on a three year horizon. Within three years time the returns from the capital market will be less than the risk free rate" Sanderatne noted.
Another analyst commenting on the yesterday's development in the country's capital market said that the risk loving retailers seem to be dominating the market once again.
"The retailer favorites in the likes of GREG, LGL and PAP have been the hot picks of these 'investors'. These are forewarning signs of a catastrophe and we need to learn lessons from our not too distant neighbour - the Dhaka Stock Exchange. Fundamentally strong stocks have seldom seen investor favour lately" he said. However according to the chief executive of the Ceybank Asset Management, Chirtra Sathkumara, this upward trend is backed by fundamentals and the reason for the indices to go up is expected corporate earnings.
"Earlier everyone said that the shares are overvalued based on historical values. But now with the expected earning the PE ratios will be around 19 times as opposed to earlier 28 times. So I think this upward trend will continue and it is backed by fundamentals"
He also said that there are signs for foreign investors to come back and invest in the country's stock market as most of the European have more or less recovered from the economic crisis.
