“Banking, energy and manufacturing sector earnings are likely to lead from the front,” Softlogic Stockbrokers has said in a research report.
Analysing 277 companies that have released December quarter results, the report said that market earnings depicted a dip by 15 per cent year on year (YoY) to Rs 51.4 billion while it gained 53 per cent quarter on quarter (QoQ).
“Diversified sector earnings dipped 4 per cent YoY with Hayleys, Vallibel One, PCH Holdings and Taprobane Holdings denoting notable declines. Healthcare and Plantations sectors recorded earnings dips of 61 per cent YoY and 23 per cent YoY led by the absence of one-off gains and the wage hike effect respectively. However Investment Trusts, Beverage, Food and Tobacco, Telecommunications and Power and Energy sectors depicted considerable earnings growth.”
The report said that though some slowness of the economy during the September quarter was expected the earnings performance of most companies was below expectations signifying a heavy dip in business activity. “A rebound in the banking counters did not materialize as a result of continued impairment charges resulting from previous gold loans. We expect market returns to show an uptrend towards medium to long term in line with expected growth in earnings.”
Courtesy - Sunday Times