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FINANCIAL CHRONICLE™ » CORPORATE CHRONICLE™ » Need Advice on SEYB.X

Need Advice on SEYB.X

+13
smallville
Fresher
anu
ss7097
optimistic
Monster
Meta Trader
chamith
ndnk
jaya
Slstock
tubal
1st
17 posters

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1Need Advice on SEYB.X  Empty Need Advice on SEYB.X Tue Mar 08, 2011 5:46 pm

1st


Equity Analytic
Equity Analytic
Hi Dear forum friends,

I have 13,000 share of SEYB.X which are averaged to 47.5/=.
I have more than 100,000/= lost at the moment.
Knowing that 1:3 rights issue can please tell me, what is the best thing I have to do with this stock( I have the holding power)? But this is exactly half of my portfolio.
What will be the future of this share?

2Need Advice on SEYB.X  Empty Re: Need Advice on SEYB.X Tue Mar 08, 2011 5:54 pm

tubal


Vice President - Equity Analytics
Vice President - Equity Analytics
@1st wrote:Hi Dear forum friends,

I have 13,000 share of SEYB.X which are averaged to 47.5/=.
I have more than 100,000/= lost at the moment.
Knowing that 1:3 rights issue can please tell me, what is the best thing I have to do with this stock( I have the holding power)? But this is exactly half of my portfolio.
What will be the future of this share?

Tough position to be in, but I think it might be a little too late for you to sell this. Now you have to hold onto the right. The reason that I am saying it's too late to sell is because the share is now at it's lowest price since last August. Now that's not a guarantee that it will not drop any further, but if you sell now, you may not be able to buy it back. So that 100,000 virtual loss will become a real loss.

3Need Advice on SEYB.X  Empty Re: Need Advice on SEYB.X Tue Mar 08, 2011 5:55 pm

Slstock

Slstock
Director - Equity Analytics
Director - Equity Analytics
@1st wrote:Hi Dear forum friends,

I have 13,000 share of SEYB.X which are averaged to 47.5/=.
I have more than 100,000/= lost at the moment.
Knowing that 1:3 rights issue can please tell me, what is the best thing I have to do with this stock( I have the holding power)? But this is exactly half of my portfolio.
What will be the future of this share?

It you bought this as a medium to long term share don;t worry. In the medium term once the right issue is done it will recover. Last quarter results also is decent. SO they have a good future . I too have shares bought over Rs 48. average. Did not buy recently to avergae further.

4Need Advice on SEYB.X  Empty Re: Need Advice on SEYB.X Tue Mar 08, 2011 6:37 pm

jaya


Assistant Vice President - Equity Analytics
Assistant Vice President - Equity Analytics
Hold it, you will receive dividend end of the month consider it is as profit for the March, End of April/May I hope you will be make profit.

Wish you courage to hold.

5Need Advice on SEYB.X  Empty wait Tue Mar 08, 2011 6:45 pm

ndnk

ndnk
Manager - Equity Analytics
Manager - Equity Analytics
My advice is u wait until the XR date. U carefully look at the share price,, If the share price comes below 35 levels then u shud buy it, (It can happen due to the market downturn...)

If price does not fall u can subscribe to the right issue @ 35 and average out your cost.....

6Need Advice on SEYB.X  Empty Re: Need Advice on SEYB.X Tue Mar 08, 2011 6:49 pm

chamith

chamith
Assistant Vice President - Equity Analytics
Assistant Vice President - Equity Analytics
join da club dude. Same here.
I did manage to avg my cost to 42.90
but seyb.x spreaded over 50% of my portfolio.

The dividend will mitigate da loss a bit. N also if u r not willing to spend any more on this u can sell your rights and cover up the lost. I feel positive about this seyb.x
i m sure it will bounce back soon or later

7Need Advice on SEYB.X  Empty Re: Need Advice on SEYB.X Tue Mar 08, 2011 6:50 pm

Meta Trader

Meta Trader
Senior Manager - Equity Analytics
Senior Manager - Equity Analytics
@1st wrote:Hi Dear forum friends,

I have 13,000 share of SEYB.X which are averaged to 47.5/=.
I have more than 100,000/= lost at the moment.
Knowing that 1:3 rights issue can please tell me, what is the best thing I have to do with this stock( I have the holding power)? But this is exactly half of my portfolio.
What will be the future of this share?

too bad. even i had it for some time . but when it broke 46 level i sold them all.

the thing is u should not invest what u can't afford to lose. money management and the risk control is the key !

but it is a good share . there is no doubt about that.

8Need Advice on SEYB.X  Empty Re: Need Advice on SEYB.X Tue Mar 08, 2011 6:58 pm

Monster

Monster
Senior Vice President - Equity Analytics
Senior Vice President - Equity Analytics
@chamith wrote:join da club dude. Same here.
I did manage to avg my cost to 42.90
but seyb.x spreaded over 50% of my portfolio.

The dividend will mitigate da loss a bit. N also if u r not willing to spend any more on this u can sell your rights and cover up the lost. I feel positive about this seyb.x
i m sure it will bounce back soon or later
It's a good share, no doubt. But 50% of portfolio with one share, i think it's not a wise decision. Rolling Eyes

9Need Advice on SEYB.X  Empty Re: Need Advice on SEYB.X Tue Mar 08, 2011 7:54 pm

optimistic

optimistic
Manager - Equity Analytics
Manager - Equity Analytics
Its really nice to see all the experts gathering on this thread to rescue this gentleman in an undesirable position and encouraging beginners like us. Looking at a portfolio with an unrealized loss of 100,000+ can be very depressing. Its the same in my case, even after having some decent shares which include LOLC and SAMP. Only exception being COCO.N (I purchased this on my brokers advice right at the top, that is Rs. 91 because he said that it will move to Rs. 160) . When asked why he thinks so, he didnt have a clue to answer that. But it was my stupidity. I trusted him because on earlier occasions he predicted YORK is a good buy when it was trading at Rs. 28 and also LCEY when it was trading at Rs. 206. On both occasions I did not buy them because I had not studied them. And so I missed the chance to board both trains. Anyhow I'm not going to sell anything to incur losses. I bought these stocks to hold long term on the first place, except COCO which he said that its a good medium term investment. I hope so. Smile



Last edited by optimistic on Tue Mar 08, 2011 9:06 pm; edited 1 time in total

10Need Advice on SEYB.X  Empty Re: Need Advice on SEYB.X Tue Mar 08, 2011 7:57 pm

ss7097

ss7097
Manager - Equity Analytics
Manager - Equity Analytics
@slstock wrote:

It you bought this as a medium to long term share don;t worry. In the medium term once the right issue is done it will recover. Last quarter results also is decent. SO they have a good future . I too have shares bought over Rs 48. average. Did not buy recently to avergae further.


slstock, why you said not to buy more to average further? Any reason for that? I purchased few thousands to average my purchase price.

11Need Advice on SEYB.X  Empty Re: Need Advice on SEYB.X Tue Mar 08, 2011 8:27 pm

anu

anu
Manager - Equity Analytics
Manager - Equity Analytics
Consider the following:

1. SEYB is going through a series of re-engineering of processes and re-structuring.
This has resulted in a decent profitability for 2010, though there is enough room for improvements.

2. As per the Ann. Rep. the cost/income ratio is 69%, way above industry standards pointing large number of unproductive staff top to bottom. Pruning is taking place; bank is going for VRS at a cost of 700Mn. which will help contain cost in the long run.

3. There is drive to bring down non-performing loans below 10% which again will contribute to the bottom line.

4. Budgetary corporate tax/Financial VAT reduction will handsomely contribute to increase of profitability in 2011.

5. The rights issue will bring in additional capital of 4.6Bn., increasing the total capital to 10.2Bn and total capital and reserves to 17.947Bn.
The NBV per share will be around 52 on the number of shares after rights. This shows a very very attractive price to BV ratio of below 1 for X shares and about 1.5 for V shares at the current levels. Further, the free capital will bring down cost of funds a lot.

6. SEYB has the blessings of regulators and Govt. and it will do a lot of good for business growth.

Suggestion: If you have the holding power and ability to buy the rights, better go for it and average your cost. Do not expect short term miracle. If you can hold for about 6 months, your return will be decent.

However, for banking shares of this nature, I would suggest to hold for a minimum of 1 year to reap better benefits.

12Need Advice on SEYB.X  Empty Re: Need Advice on SEYB.X Tue Mar 08, 2011 8:38 pm

Meta Trader

Meta Trader
Senior Manager - Equity Analytics
Senior Manager - Equity Analytics
@optimistic wrote:Its really nice to see all the experts gathering on this thread to rescue this gentleman in an undesirable position and encouraging beginners like us. Looking at a portfolio with an unrealized loss of 100,000+ can be very depressing. Its the same in my case, even after having some decent shares which include LOLC and SAMP. Only exception being COCO.N (I purchased this on my brokers advice right at the top, that is Rs. 91 because he said that it will move to Rs. 160) . When asked why he thinks so, he didnt have a clue to answer that. But it was my stupidity. I trusted him because on earlier occasions he predicted YORK is a good buy when it was trading at Rs. 28 and also LCEY when it was trading at Rs. 206. On both occasions I did not buy them because I had to not studied them. And so I missed the chance to board both trains. Anyhow I'm not going to sell anything to incur losses. I bought these stocks to hold long term on the first place, except COCO which he said that its a good medium term investment. I hope so. Smile

well i strongly believe that if u really want to learn the art of investing or trading you must experience what it feels like to be in the losing side.
that how i learned the art . Twisted Evil

13Need Advice on SEYB.X  Empty Re: Need Advice on SEYB.X Tue Mar 08, 2011 9:04 pm

Fresher


Moderator
Moderator
@Meta Trader wrote:
well i strongly believe that if u really want to learn the art of investing or trading you must experience what it feels like to be in the losing side.
that how i learned the art . Twisted Evil

agreed !!
i too learnt that patience plays a vital role. yet to master some areas though. still a long way away form being near perfect and I know it will take time.

14Need Advice on SEYB.X  Empty Re: Need Advice on SEYB.X Tue Mar 08, 2011 9:15 pm

smallville

smallville
Associate Director - Equity Analytics
Associate Director - Equity Analytics
Well I think this would bounce back soon.. We're seeing a down market for couple of days and once the WAPO effect is gone the market will be back to normal.. However.. its really difficult to predict.. Seems like the counters are performaing but the next moment u see its sold for an absurd price level ;-(

15Need Advice on SEYB.X  Empty Re: Need Advice on SEYB.X Tue Mar 08, 2011 9:18 pm

Meta Trader

Meta Trader
Senior Manager - Equity Analytics
Senior Manager - Equity Analytics
npp wrote:
@Meta Trader wrote:
well i strongly believe that if u really want to learn the art of investing or trading you must experience what it feels like to be in the losing side.
that how i learned the art . Twisted Evil

agreed !!
i too learnt that patience plays a vital role. yet to master some areas though. still a long way away form being near perfect and I know it will take time.

it is a matter of finding a system that will give u maximum return with minimum risk.
and most important thing is STICK TO THAT PLAN AND EVALUATING IT CONSTANTLY Twisted Evil Twisted Evil Twisted Evil

16Need Advice on SEYB.X  Empty Re: Need Advice on SEYB.X Tue Mar 08, 2011 9:20 pm

optimistic

optimistic
Manager - Equity Analytics
Manager - Equity Analytics
@Meta Trader wrote:
@optimistic wrote:Its really nice to see all the experts gathering on this thread to rescue this gentleman in an undesirable position and encouraging beginners like us. Looking at a portfolio with an unrealized loss of 100,000+ can be very depressing. Its the same in my case, even after having some decent shares which include LOLC and SAMP. Only exception being COCO.N (I purchased this on my brokers advice right at the top, that is Rs. 91 because he said that it will move to Rs. 160) . When asked why he thinks so, he didnt have a clue to answer that. But it was my stupidity. I trusted him because on earlier occasions he predicted YORK is a good buy when it was trading at Rs. 28 and also LCEY when it was trading at Rs. 206. On both occasions I did not buy them because I had to not studied them. And so I missed the chance to board both trains. Anyhow I'm not going to sell anything to incur losses. I bought these stocks to hold long term on the first place, except COCO which he said that its a good medium term investment. I hope so. Smile

well i strongly believe that if u really want to learn the art of investing or trading you must experience what it feels like to be in the losing side.
that how i learned the art . Twisted Evil

true true. I agree with you. Well. it hasnt been a whole lot of time since I entered the CSE. During the 6 months experience at CSE, I have roughly lost something like Rs. 300,000 but I've gained much more than I lost. Regardless of the losses, I have gained some valuable tips to incorporate in trading stocks from this forum. So I'm really grateful for that. I think if people learn things the hard way, chances of failure or loss will be very low. Downfalls only add to your experience. I still have faith in this market. Patience is the name of the game.

17Need Advice on SEYB.X  Empty Re: Need Advice on SEYB.X Tue Mar 08, 2011 9:20 pm

StocksWatch


Assistant Vice President - Equity Analytics
Assistant Vice President - Equity Analytics
What happend to Seylan shares is bit exceptional to me. The company has shown a reasonable growth in their annual report yet the price depreciate. I understand with the announcement of rights issue, those who do not have sufficient money will opt to sell their shares and this will drag the price down to some extent. But we saw a considerable drop in the price unlike the shares of those other companies which announced rights issue recently.

I am not execption to the situation and my avg cost is 45.60. But I will not sell my shares as I see a good potential with this share medium to long term especially after the results of their next quater. So I will not recommend anybody to sell this share at the current market price.

18Need Advice on SEYB.X  Empty Re: Need Advice on SEYB.X Tue Mar 08, 2011 9:24 pm

tubal


Vice President - Equity Analytics
Vice President - Equity Analytics
@smallville wrote:Well I think this would bounce back soon.. We're seeing a down market for couple of days and once the WAPO effect is gone the market will be back to normal.. However.. its really difficult to predict.. Seems like the counters are performaing but the next moment u see its sold for an absurd price level ;-(

What we need is an index that's a cross between the MPI and the ASI. Something that contains only liquid shares representing 2-3 from each sectors.

Both the ASI and MPI are now totally useless. MPI is lagging because institutions are more or less out of the market. ASI is even worse cause it's completely distorted by the illiquids. Until such a thing comes about the best thing to do maybe to rely on the Advance/Decline ratio

19Need Advice on SEYB.X  Empty Re: Need Advice on SEYB.X Tue Mar 08, 2011 9:38 pm

Meta Trader

Meta Trader
Senior Manager - Equity Analytics
Senior Manager - Equity Analytics
@tubal wrote:
@smallville wrote:Well I think this would bounce back soon.. We're seeing a down market for couple of days and once the WAPO effect is gone the market will be back to normal.. However.. its really difficult to predict.. Seems like the counters are performaing but the next moment u see its sold for an absurd price level ;-(

What we need is an index that's a cross between the MPI and the ASI. Something that contains only liquid shares representing 2-3 from each sectors.

Both the ASI and MPI are now totally useless. MPI is lagging because institutions are more or less out of the market. ASI is even worse cause it's completely distorted by the illiquids. Until such a thing comes about the best thing to do maybe to rely on the Advance/Decline ratio

true. this carsons family killed the ASI . technicals are basically useless at the moment Idea

20Need Advice on SEYB.X  Empty Re: Need Advice on SEYB.X Tue Mar 08, 2011 9:41 pm

Fresher


Moderator
Moderator
it is absolutely ridiculous that an illiquid share, can decide the direction of the ASI on a particular day just because one small trade took place with a great price movement.

but then, we didn't complain about it till recently, so where did it go wrong? WAPO is one thing

21Need Advice on SEYB.X  Empty Re: Need Advice on SEYB.X Tue Mar 08, 2011 11:18 pm

xmart

xmart
Senior Manager - Equity Analytics
Senior Manager - Equity Analytics
very nice.. i'm also holding few thousands of X @46. once upon a time, right issue gave positive impact to share price. but today, regardless of share, right issue is treated as negative sign. problem is most of inexperienced traders don't know about rights, splits, cap. of reserves, warrants etc. they treat split, warrants as positive, all others are negatives.

we could see that in case of ECL, LFIN, SMLL, SEYB, CSEC etc.

but what i observed is, when announce the right price will drop to the rock bottom. thereafter, when reach to the XR date price will go up gradually. one or two times, we could see sudden boost in share prices. we saw that in BBH, MARA, CSF, CSEC, EAST.

if you are mid- long term investor, best thing is to apply for rights and keep those for 1 year. if you are trader, don't worry, keep watching closely. good trading opportunities are attached to it.

22Need Advice on SEYB.X  Empty Re: Need Advice on SEYB.X Tue Mar 08, 2011 11:26 pm

salt

salt
Vice President - Equity Analytics
Vice President - Equity Analytics
If I have this share probably, i will sell and wait. The chance of it going up from today's level is remote. The chance of going it down to 35 ( or even 36-37)level is high. Since the upward movement looks muted at this level, i will sell and wait , if it down buy little by little. if it goes up, forget it.

Buying to average it is fooing you. ( read irrational extrubrance, it explains)

If you belive the share worth holding a long term, i have problem of holding it.

@xmart,
If you signalling theory in C/F, you can sharpen the idea

23Need Advice on SEYB.X  Empty Re: Need Advice on SEYB.X Tue Mar 08, 2011 11:34 pm

xmart

xmart
Senior Manager - Equity Analytics
Senior Manager - Equity Analytics
@salt wrote:If I have this share probably, i will sell and wait. The chance of it going up from today's level is remote. The chance of going it down to 35 ( or even 36-37)level is high. Since the upward movement looks muted at this level, i will sell and wait , if it down buy little by little. if it goes up, forget it.

Buying to average it is fooing you. ( read irrational extrubrance, it explains)

If you belive the share worth holding a long term, i have problem of holding it.

@xmart,
If you signalling theory in C/F, you can sharpen the idea

C/F?? scratch

24Need Advice on SEYB.X  Empty Re: Need Advice on SEYB.X Wed Mar 09, 2011 7:06 am

anu

anu
Manager - Equity Analytics
Manager - Equity Analytics
@anu wrote:Consider the following:

1. SEYB is going through a series of re-engineering of processes and re-structuring.
This has resulted in a decent profitability for 2010, though there is enough room for improvements.

2. As per the Ann. Rep. the cost/income ratio is 69%, way above industry standards pointing large number of unproductive staff top to bottom. Pruning is taking place; bank is going for VRS at a cost of 700Mn. which will help contain cost in the long run.

3. There is drive to bring down non-performing loans below 10% which again will contribute to the bottom line.

4. Budgetary corporate tax/Financial VAT reduction will handsomely contribute to increase of profitability in 2011.

5. The rights issue will bring in additional capital of 4.6Bn., increasing the total capital to 10.2Bn and total capital and reserves to 17.947Bn.
The NBV per share will be around 52 on the number of shares after rights. This shows a very very attractive price to BV ratio of below 1 for X shares and about 1.5 for V shares at the current levels. Further, the free capital will bring down cost of funds a lot.

6. SEYB has the blessings of regulators and Govt. and it will do a lot of good for business growth.

Suggestion: If you have the holding power and ability to buy the rights, better go for it and average your cost. Do not expect short term miracle. If you can hold for about 6 months, your return will be decent.

However, for banking shares of this nature, I would suggest to hold for a minimum of 1 year to reap better benefits.

I did a study on NTB too. Taking the Profit before tax and financial VAT for 2010, I adjusted the profit after tax with the new budget proposed tax rates.

The result - even on the increased share holding, the EPS will be 6.65 and PE will be 12.04

The learning outcome - Even if the PBT is going to remain same for NTB in 2011 - same as 2010, it will have attractive ratios of EPS of 6.65, PE of 12.04 (assuming a price of 80), PBV of 2.71 which are very very attractive for a growing bank, providing good upward potential.

Caution: May not be that much suitable for short term traders.

I will comment on other banking shares later - as this calculation will present good prospect in other banking giants like COMB, HNB & SAMP too.

25Need Advice on SEYB.X  Empty Re: Need Advice on SEYB.X Wed Mar 09, 2011 9:15 am

1st


Equity Analytic
Equity Analytic
Thank you very much Friends.
Appreciate all your comments and advises.
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