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FINANCIAL CHRONICLE™ » CORPORATE CHRONICLE™ » Right Time for Micro Finance Companies

Right Time for Micro Finance Companies

+2
Harry82
Gainer
6 posters

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1Right Time for Micro Finance Companies  Empty Right Time for Micro Finance Companies Tue Feb 23, 2016 11:19 am

Gainer

Gainer
Associate Director - Equity Analytics
Associate Director - Equity Analytics

Right Time for Micro Finance Fastest-Growing Companies

BLI and COCR is the No One Fastest Growing companies.

Harry82

Harry82
Senior Vice President - Equity Analytics
Senior Vice President - Equity Analytics

The Finance Company- No One Fastest Growing company

Gainer

Gainer
Associate Director - Equity Analytics
Associate Director - Equity Analytics

Gainer wrote:Right Time for Micro Finance Fastest-Growing Companies

BLI and COCR is the No One Fastest Growing companies.

BLI and COCR Number One Fastest Growing companies

Harry82

Harry82
Senior Vice President - Equity Analytics
Senior Vice President - Equity Analytics

COCR - NORMAL GROWTH

Gainer

Gainer
Associate Director - Equity Analytics
Associate Director - Equity Analytics

BLI huge growth

jayathu


Assistant Vice President - Equity Analytics
Assistant Vice President - Equity Analytics

Why now is the right time to invest in finance company?? I totally disagree with this topic.

I think due to several regulatory changes what has happened i can see there margin getting squeezed from this yr onwards. Increment of SRR and Tax rate will negatively hamper them.

Most of the finance companies major revenue source is Leasing. We Can see major downtrend in growth in leasing portfolio. one of the reason CB on friday raised the interest rate was to control credit growth.  

I think other sectors such as manufacturer or export will be better to look at.

Teller

Teller
Moderator
Moderator

Keep eye on BLI, a sure hit

Brinthan

Brinthan
Senior Manager - Equity Analytics
Senior Manager - Equity Analytics

jayathu wrote:Why now is the right time to invest in finance company?? I totally disagree with this topic.

I think due to several regulatory changes what has happened i can see there margin getting squeezed from this yr onwards. Increment of SRR and Tax rate will negatively hamper them.

Most of the finance companies major revenue source is Leasing. We Can see major downtrend in growth in leasing portfolio. one of the reason CB on friday raised the interest rate was to control credit growth.  

I think other sectors such as manufacturer or export will be better to look at.

Iam agree with jayathu...Last two quarters are shown excellent financials by finance conpanies because of leasing ,and they get big advantage of low interest rates..When a bank grant loan for 10%-12% interest rate ,Finance companies lend @ the rate of 20%-28% interest rates..Most of finance companies borrow loan from banks and grant loans for their customers for higher rates.
But in this present scenario interest rates are going to increse day by day...The finance companies interest margin automatically coming down.Thet can 't lend 35%-45% intrest rates..
And present market condition is not suitable for get leasing businesses..
My final view is investing finance company is not suitable for in this present market situation...
(If u have FC stocks hold until Annual finanicial statements...And make sure sell After that...because next year they will face biggest challenge..and 100% there profits going down.)

Gainer

Gainer
Associate Director - Equity Analytics
Associate Director - Equity Analytics

Yesterday COCR went up 3.00 + trading at 50.00

BLI any time withing one day it will break 25% and no sellers , only buyers

EquityChamp

EquityChamp
Moderator
Moderator

The time has not come yet to spot a direction. The best is to invest based on long term potentiol and avoid near term speculated results or announcements.

Gainer

Gainer
Associate Director - Equity Analytics
Associate Director - Equity Analytics

COCR yesterday foreign buy

jayathu


Assistant Vice President - Equity Analytics
Assistant Vice President - Equity Analytics

To prove my point that this is not the time to invest in finance companies

http://www.economynext.com/Sri_Lanka_vehicle_purchases_plunge_after_tax_hike,_leasing_controls-3-4326-1.html

Micro finance companies main revenue generator is leasing.

Gainer

Gainer
Associate Director - Equity Analytics
Associate Director - Equity Analytics

Broader foreign inflows vital to help SME, micro industries - Governor

Central Bank Governor Arjuna Mahendran said Sri Lanka's capital wealth has been destroyed due to the conflict and through unfortunate experiments with the nationalisation of industries.

Commenting on challenges faced by these small and medium enterprise and micro financing sectors, the governor said that there has been a paucity of deposits in Sri Lanka and it is imperative to encourage broader flows of foreign funding particularly into small and medium enterprise and micro financing segments.

"SME and micro financing sectors remain largely unexploited and the penetration and the growth of micro finance activities have been hindered due to entrenched mindsets which persisted in the country for several decades.

The country has to use the power of persuasion to bring alignments between different thinking and different interested groups in order to move the country forward," Mahendran said.

Meanwhile, Finance Minister Ravi Karunanayake said Sri Lanka is now standing on the cusp of a historic moment. The private sector is given the opportunity to spearhead and move the country forward. In the meantime the government wants to make sure exchange controls are free and will take necessary steps to eliminate unwanted bureaucratic processes that overlap one another.

EquityChamp

EquityChamp
Moderator
Moderator

It is nice to see Gainer talking on different topics rather than illiquid share topic. Finance sector stocks will demonstrate a fair degree of volatility in short to medium term but on the long run these shares will offer you above-average returns.

jayathu


Assistant Vice President - Equity Analytics
Assistant Vice President - Equity Analytics

@equitychamp i agree with you that finance shares will show fair degree of volatility in short to medium term. In the long run they will be fine. It will take them some time to change there product mix to tackle the squeezing margins this yr. All the finance companies for the last three to four yrs was riding vehicle leasing boom. This yr through the budget proposals and appreciating Yen has curtailed the vehicle import by half in jan alone.

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