Harry82 wrote:
It is surprising to watch the local investors selling quality shares at lower prices at loss High interest rates will not make the investors to exit from the market as these who invest in shares hope to get more than 15% or 20% a year.
Provide untimely is the policy changes that upset the investors. When the market is low the brokers should be allowed to give credit as they please.
It is good for the investors. At the moment credit can be extended up to one year, so that investors can reap benefit of company performances. Period of credit facility should be gradually reduced when the market goes up. so that the small investors will be protected and they can recover the losses. They have incurred so far.
This is an extract from a foreign fund manager report from last week. i cannot divulge details of fund or manager for obvious reasons.
quote " I met with 15 companies in Colombo, Sri Lanka last week. Investor sentiment is about as bad
as it can get – but earnings are rising strongly and stocks are cheap. This is a classic case of
“post-devaluation blues,” in which investors hit peak discouragement precisely at the point when
potential return is highest. Analysts at ………………….(who hosted me in Colombo and set up the
meetings) say earnings are on track to grow 28% in Sri Lankan rupee (LKR) terms this fiscal year
(ends March 31, 2013). Companies I met with are:
Why are investors so negative? Several reasons -- basically all of which are old news and priced
in. Between February and May the Sri Lankan rupee (LKR) fell from 114/US$ to 134/US$.
Interest rates rose sharply and remain high today. For example, new car and truck leases are
being written at 22%, up from 13.5% before the devaluation. Meanwhile, high oil prices pushed
up energy costs throughout the economy. The government budget deficit worsened, though it has
since stabilized. Topping it off, the government raised a variety of excise and other taxes to
depress imports and keep the trade deficit down.
This is standard stuff for a post-devaluation period. The underlying forces in Sri Lanka are still
quite positive (and anecdotal data from companies suggests business is already picking up). One
obvious sector to buy here would be banks and finance companies, for which several good things
are happening:
Sri Lankan banks are benefiting from several forces now:
Net interest margins are going up (because lending rates are rising more than funding costs);
Loan books are expanding on the corporate side in step with the size of the devaluation;
Fee income is generally rising in line with loan books;
Net NPLs are okay because lending is heavily collateralized;
Corporate tax rate was cut to 28% from 35% in fiscal 2011.
unquote".
this is just to get a perspective on a foreign fund viewpoint.
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
