Definitely, Iran and the USA factors are going to benefit tea industry in Sri-Lanka in the coming quarters and years. They will be two countries that will create more demand for high quality tea in Sri-Lanka.
After falling Tea auction averages below Rs.400, now it is trading around Rs.400/. Currently there is demand for high grown tea. One positive factor for high grown tea is during last two auctions their tea prices have improved when comparing with corresponding last year. We are going to have two quality seasons namely UVA season and Western high grown seasons in the coming months and quarters. As we are seeing recovery and attractive tea prices in Kenya we should see in Sri-Lanka as well. We will wait and see.
Tea companies’ more exposure to high grown tea such as TPL, MPRH, BOPL, and MASK, should be benefit lot in the event of higher prices for high grown tea. If we see higher tea prices for UVA tea, MADU and NAMU should benefit more. UDPL and HAPU are also could have some upside potential in a favourable industry environment.
Finally on valuation tea stocks also should go up in this bull market especially during remaining stages of bull market when market players try to create demand for defensive stocks such as food related stocks.
This bull market has more legs and more legs for all types of stocks. In bull market stocks will go up due to so many reasons including due to following reasons.
Strong market condition create demand for many stocks
There will be demand for stocks according to the stage of market in bull markets
Stocks will go up due to value and growth
There are investors that they will buy out of favour stocks as well
There are also investors and traders buy stocks on speculation
There are momentum players in the market
Then there are some market players they will add attractive illiquid stocks which can have higher liquidity in bull market later.
Finally there are attractive stocks having great value, momentum, higher ROE and having strong industry outlook. These are the ones to watch very closely in bull markets as they will break their 52 week high again and again. They will become super winners. We should find at least one super stock to recover losses we made in the past.
http://www.bangkokpost.com/news/asia/623552/sri-lanka-cuppa-cheers-end-of-iran-sanctions Sri Lanka's cuppa cheers end of Iran sanctions
http://nation.lk/online/2015/07/25/tea-exporters-seek-clarity-on-iran/ Tea exporters seek clarity on Iran