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FINANCIAL CHRONICLE™ » FINANCIAL CHRONICLE™ » What should we except from market now ? Bull or Bear Or ?

What should we except from market now ? Bull or Bear Or ?

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Slstock

Slstock
Director - Equity Analytics
Director - Equity Analytics

Lets start by asking ourself this. Has most shares have had major corrections even 50-70%? Are a significant number of shares in the market trading around or below PE of 10. What will the overall market PE be after March 31 results?


If you think , their results are going to worsen in the future ( short- medium term) and they deserve lesser PE, does the current prices reflect those discounts?

Okay on a positive note may I ask you how much more should the below suffer ? I am not saying it won't as panic sellers and non believers can sell lower and bring them down

These shares are just a random example.

Old Speculatives
a) GREG have come down from RS 150 to Rs 16. Do you want it to GREG to drop to Rs 5! Is that a fair value?
b) REEF has come down from Rs 90 to Rs 30.
c) Hunt from Rs 2000 to Rs 350.
d) PCH from Rs 30 to 8
e) EAST from Rs 50 to Rs 13
f) TWOD from RS 40 to Rs 15
g) BUKI from Rs 1600 Rs 849
i) HVA from Rs 70 to Rs 15
j) PAP from Rs 8 to Rs 2.5



Some fundamentals ( random) including blue chips in present market
a) DFCC dropped from Rs 250 to RS 112 ( PE should be arund 10-11 now. Trading little above NAV)
b) JINS from Rs 20 to RS 11 ( below IPO, NAV 8.4 , PE 7)
c) DIMO from Rs 1800 to Rs 950 ( PE around 3-4, NAv just above current price )
d) KCAB Rs 120 to RS 65 ( tradign below NAv, PE around 7-Cool
e) BFL from Rs 500 to rs 130 ( current PE around 7-Cool
f) GLAS from RS 12 to RS 5.8 ( current PE around 6-7)
g) RICH from RS 16 to Rs 7.5 ( PE around 7 )
h) CDB from RS 105 to Rs 40 ( Pe around 5-6 even counting no profits for march)
i) SPEN Rs 220 to RS 114
j) LWL from Rs 180 to Rs 70

Okay let take some IPOs

a) SHL from RS 29 to 11
b) FLCH from Rs 5 to 2
c) BIL Rs 5 to Rs 3.4
d) TJL From RS 14 to 7
e) PLC from RS 18 to 11



What about introductions
a) PCP Rs 80 high to RS 17
b) OGL from high Rs 45 to Rs 18
c) AGST RS 20 to Rs 11
d) CDB Rs 110 to Rs 40

Right issues ( leave it as an exercice to find issue price and the trading price

a) LDEV
b) KAPI
c) SMLL
d) CDB

Splits of illiquids
HDEV
MORI


If I keep going there will be so much more. How much more correction do you need even counting few bad quarter for some of them? Note valuations are not always PE based only. There are other valuations method and factors.


Yes there are still a few overvalued and illiquid shares which are yet to be corrected Ex : CARS, CARG, KZOO, PARA which might have their own reasons.

But if you expect market to drop further a lot,

a) how much more should these shares deserve to drop even counting drop in profits for some of these companies . We need to look at historical values, historical backing and other factors also in analysis. Just simply saying SPEN should be at Rs 60 does not work as for that to happen Harry J need to not care, and the Foriegn funds also
b) if you think more negativity will come to CSE, how much should ASI get discounted from now ( ASI 5400), 10%, 20% ,30% or 40% overall
c) After March 31 how much will be the new valuation for overall CSE



I do not know about you guys as some want bull and some want bear. But I will tell you what I want. I would like the market to stabilize further for some more time.


Why ?

1) Get the panic and worried sellers out of the way during this process so to make a clearer path before a bull( so there will be lesser obstacles). I still see some people willing to sell at a drop of a pin. But compared to before it is much less that is a good sign.

2) Some people are still insecure and have less confidence in market. If there is a few days down trend some people still sell like there is no end. ( again much better than before). Even in the forum I see many think only short term only as "holding" is a problem for them.
3) This fragile mentality , trust and confidence need to build positively for a proper bull run so people do not sell when the market goes up just a little. They need to trust their shares are worth more accept for small profit. Else this bull bear fight cycle will remain. Longer it remains the market will get to avoid further drastic crashes making way for a future bull ( do not when yet).

Sudden ups and sudden down now are not healthy for market.


The points I mentioned are not to suggest bear or bull right now but to rationally look at where the share valuations and market stand now. All I can say is until bear is in action with bad news coming to make it worsen , bear supporter predictions ( some of them) will come true and when the true bull starts bears are going to get beaten as I can easily see 50-100% uptrends for certain shares.

It is too soon or too late to enter now? I do not know as it depends on your strategy. Hope some things I mentioned will help in someway.

rishanpossitive


Manager - Equity Analytics
Manager - Equity Analytics
For some shares it's too late to enter.LLUB,CTC,CINS, and some plantations.But most shares still available at discount.Happy and quick hunting.

kasun333


Senior Manager - Equity Analytics
Senior Manager - Equity Analytics
slsstock what did u think about PHAR

Redbulls

Redbulls
Director - Equity Analytics
Director - Equity Analytics
Some fundamentals ( random) including blue chips in present market
a) DFCC dropped from Rs 250 to RS 112 ( PE should be arund 10-11 now. Trading little above NAV)
b) JINS from Rs 20 to RS 11 ( below IPO, NAV 8.4 , PE 7)
c) DIMO from Rs 1800 to Rs 950 ( PE around 3-4, NAv just above current price )
d) KCAB Rs 120 to RS 65 ( tradign below NAv, PE around 7-
e) BFL from Rs 500 to rs 130 ( current PE around 7-
f) GLAS from RS 12 to RS 5.8 ( current PE around 6-7)
g) RICH from RS 16 to Rs 7.5 ( PE around 7 )
h) CDB from RS 105 to Rs 40 ( Pe around 5-6 even counting no profits for march)
i) SPEN Rs 220 to RS 114
j) LWL from Rs 180 to Rs 70

At present some of the above fundamental counters are seems to be bottom out because the trend is moving sideways.
If the investors confidence gain towards the CSE, may be we can see the upward movements.

soileconomy

soileconomy
Vice President - Equity Analytics
Vice President - Equity Analytics
A good article.
I think at present investor confidence in the market has come down.(Let me take it as No-1).I may say 50%

Escalating cost (Due to Fuel , electricity and other , loss of foreign markets)will hurt company profits further(PER will be affected).(No -2)I may Predict-30%

Upward trend in Interest rate will keep investors to invest in fixed income tools(TB, FD)-20%.

It is a snapshot observed by me..

sriranga

sriranga
Co-Admin
Thanks Slstock for your valuable article related to the current CSE situation.
Most of the stocks are bottom out no doubt, for those who have fair investment/trading strategy feel these days may be the right time to move in.
As Soileconomy stated points also need to be considered.
Overall, Investor sentiment and Quarterly reports are going to play key roles on the market direction in coming days.
Lets hope for the good.

http://sharemarket-srilanka.blogspot.co.uk/

manula


Vice President - Equity Analytics
Vice President - Equity Analytics
Thanks Slstock for the good analysis ... yes this seem to one bottom out .. but I don't think their will be big upward movement if their is not a big push.. EPF selling their shares to foreigners to get money for the treasury.. with these news market is having little movement...

Next issue is even holding fundamental share for long term... like 5 Y.. excepting high price. but the value of the rupee will be a question in that time.. is it worth..???

The lack of investor confidence is a another issue due to market not performing well same time but as soileconomy say escalating cost hit not only the market companies performance it will hit the normal investors about his ability to invest/stay in the market. As seen these days foreigners are buying good/fundamental shares (like JKH/COMB...) for long term ... but can many local investors have the ability to hold the shares for long term ???

Mainly I think better choice is these type of market is swing trading with some gain...There will be no bull or bear....

UKboy

UKboy
Senior Vice President - Equity Analytics
Senior Vice President - Equity Analytics
Swing trading is a good option however under the current situation but it only works if you buy something in small quantities & if you have less than a million to spend on shares..
Time to time you can see bear or bull rules the market. I entered to the market at the hight of crisis in sri lanka back in 2001/2002 & at the time it was all about negative news. I must admit that I didnt earn anything significantly other than learning.
Then we had a decent growth in the market from 2003 to around 2007. There after we had a very difficult period untill 2009. I guess everyone knows the story since then.

It was really hard to make money in between 2007 to 2009. You could consider 10%-15% gain was a good trade. We had to try every possible option to make money. As a result of that my PF still contains some Vanik shares. Not like now those days even government funds also tried buying shares at low & most of their movements were wise decisions.

You can find that not many high networth traders are doing trades at the moment. But I must say some of these HN Traders failed to succeed in this market big time. They must be holding large unrealised losses at the moment but most of professional traders already forgot the market for a while. Unless political influence lead them ( professional traders) back to the market, I cannt see why they want to come to CSE any time soon.
Its difficult to do tradings at the current market conditions. (Of cause if you have relatively small amount to spend yes its still possible). This new system does not make any help for traders. (At least it should be working fine by now).

CSE always lacks (retail) investors.

The positive sides I see in this market.
I believe cash rich government funds will do every possible thing to control & stop the index moving into negative territory.
What else? well.................thats all to be honest.

illuminati


Senior Manager - Equity Analytics
Senior Manager - Equity Analytics
The latest situation is government funds are keeping the ASI at these levels artificially. Over 40 counters are trading below 14/2/2012 ( worst day so far this year) and the No keeps increasing daily. So the ASI per say will hold for some time but the declining trend will continue quite discreetly. A smart distribution phase I guess.

m2_yapa

m2_yapa
Senior Manager - Equity Analytics
Senior Manager - Equity Analytics
All think market has bottom up..how about A next world war along with un stabilized global economy...
Still we cannot c green light...it is still Orange and not red or green..
If it is going to happen we can not predict the impact...
I am giving you a good point of re-thinking..
Good luck to all

rishanpossitive


Manager - Equity Analytics
Manager - Equity Analytics
Mr Illuminati, Again you are wrong.Can you tell me some shares governmeny funds have bought or have moved up to keep index green.Don't lie.What's happening is foreign funds and foreigners are buying blue chips and some high capitalization shares and they have moved up Example( JKH,CTC,LLUB).Some shares haven't moved yet( COMB,HNB,NDB,TKYO)

Rajaraam


Vice President - Equity Analytics
Vice President - Equity Analytics
@illuminati wrote:The latest situation is government funds are keeping the ASI at these levels artificially. Over 40 counters are trading below 14/2/2012 ( worst day so far this year) and the No keeps increasing daily. So the ASI per say will hold for some time but the declining trend will continue quite discreetly. A smart distribution phase I guess.

Dear friend, not govt. funds illu, foreign net inflow so far this year exceeds Rs. 20 bn. And CB expects more .See following link pl.

http://forum.srilankaequity.com/t17159-foreign-purchase-and-sales-march-2012#113436

manula


Vice President - Equity Analytics
Vice President - Equity Analytics
@UKboy wrote:Swing trading is a good option however under the current situation but it only works if you buy something in small quantities & if you have less than a million to spend on shares..
Time to time you can see bear or bull rules the market. I entered to the market at the hight of crisis in sri lanka back in 2001/2002 & at the time it was all about negative news. I must admit that I didnt earn anything significantly other than learning.
Then we had a decent growth in the market from 2003 to around 2007. There after we had a very difficult period untill 2009. I guess everyone knows the story since then.

It was really hard to make money in between 2007 to 2009. You could consider 10%-15% gain was a good trade. We had to try every possible option to make money. As a result of that my PF still contains some Vanik shares. Not like now those days even government funds also tried buying shares at low & most of their movements were wise decisions.

You can find that not many high networth traders are doing trades at the moment. But I must say some of these HN Traders failed to succeed in this market big time. They must be holding large unrealised losses at the moment but most of professional traders already forgot the market for a while. Unless political influence lead them ( professional traders) back to the market, I cannt see why they want to come to CSE any time soon.
Its difficult to do tradings at the current market conditions. (Of cause if you have relatively small amount to spend yes its still possible). This new system does not make any help for traders. (At least it should be working fine by now).

CSE always lacks (retail) investors.

The positive sides I see in this market.
I believe cash rich government funds will do every possible thing to control & stop the index moving into negative territory.
What else? well.................thats all to be honest.


@UK boy.. yes.. fully agree with you.. Cash rich government funds or HINWI has to back the market to boom..still that we can see small up and downs (head and shoulder pattern)...but only thing these cash rich government funds now selling there shares to foreign parties for some $$$ required by treasury (and the commissions big people..??) With those news market is moving up and downs...

market bull

market bull
Assistant Vice President - Equity Analytics
Assistant Vice President - Equity Analytics
Bull will continue at least for another 6,7 days

aran

aran
Manager - Equity Analytics
Manager - Equity Analytics
Another interesting dig from slstock this single post reflects the personality of slstock i think he post this message at the exact end of the bear cycle and the investors fears like small kids

nimantha80


Senior Vice President - Equity Analytics
Senior Vice President - Equity Analytics
as a member of both forums what i can say is the cold war between forum andmins continues.

guruji

guruji
Manager - Equity Analytics
Manager - Equity Analytics
Pl giv due respect to the name of slstock,we learnt lot from him if u post foolish analysis on his name as did in jins amalysis today,ur forum n admin ppl going to be donkeys,n we need good ethics not only money

Quibit


Senior Vice President - Equity Analytics
Senior Vice President - Equity Analytics
@guruji wrote:Pl  giv  due  respect  to  the  name  of  slstock,we  learnt  lot  from  him  if  u  post foolish  analysis  on  his  name  as  did  in  jins  amalysis  today,ur  forum   n  admin  ppl  going  to  be  donkeys,n  we   need  good  ethics  not  only  money

guruji, as a public forum with over 12,000 members, we are unable to control 'who posts what' unless these posts violate forum rules and ethics in such case moderator involvement become mandatory. I don't find anything wrong with Jins article of SLS. I am sure as an intelligent investors we value and respect  time and effort of every member including SLS. Therefore I think its time we start investing in the stock market instead of determining the colors and shapes of our members. Guruji, thank you for your valued contribution.

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