CSE is now experiencing a different easing off period after it recording a massive sell off due to following factors.
1. Many believe the fact that China would not extend USD 1.5Bn funding which happened last Friday
2. UNHRC negative impact which is highly unlikely where everyone can know by last week of March
3. Controversial SEC directive pinching the market to fall back on top of above.
The above factors pushed everyone to a sidelines sentiment where many new investors would have already sold at a loss or some may be holding on to investments. However, it is worth to note that item no 1 & 3 are already solved. However, we are experiencing following in CSE now.
Types of investor sentiments in CSE now?
Feeling Risky - Many retail investors whom have burnt finger believe the fact that it's bit risky to invest.
Feeling worried - Many who have not realized any loss are holding on to the investments knowing a possible reversal which many have experienced during COVID-19 pandemic which apparently bounced back.
Feeling positive but bargain lovers - Investors whom made profits are safely keeping money expecting to buy at low prices. Mostly these are HNWI and institutions.
In the current context, the market turned negative reducing by 2,000 points from the peak and now easing off with relatively low turnover. The drop is more than 20% in ASPI. The market PE is well below 12X multiples.
Therefore, considering the above facts, ASPI is OVERSOLD if compared with Frontier and PEER markets. Currently the people selling in CSE similar to a selling of a PROPERTY OWNED at COLOMBO 7 @ 20% DISCOUNTED VALUE. Will you sell your COLOMBO 7 property if someone buy on bargain?