Monetary Policy Review next Tuesday

Backstage · 1 Monetary Policy Review next Tuesday Fri Oct 11, 2013 11:33 am

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The monetary policy review is on Tuesday the 15th. I am expecting a minimum 25 basis points reduction. Also expecting CFVF to go above Rs.17 as a result. What about you ?

Slstock · 2 Re: Monetary Policy Review next Tuesday Fri Oct 11, 2013 12:24 pm

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Yes , it is matte of time till they cut the rates. We all eargely ( market too) expecting it.

Antonym · 3 Re: Monetary Policy Review next Tuesday Fri Oct 11, 2013 1:45 pm

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If everyone is expecting a 25 basis points reduction, I guess the market has already factored it into share prices.
Old Trading Strategy: "Buy the rumor, sell the news." Smile

Backstage · 4 Re: Monetary Policy Review next Tuesday Fri Oct 11, 2013 2:15 pm

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Don't know about "everybody" I posted this as I was wondering if it was only me, as the usual pre announcement hype doesn't seem to be there. CBSL seems to be cavalier about growth forecast for this year. Do they know something that we don't ? I expect mediocre results from most companies last quarter. Is it going to be inflows into infrastructure that is going to spur the growth ? Or access to Chinese market for our exports ?

Antony, nice to see you in this neck of the woods, please hang around, the quality of the forum deteriorates when seniors sit back. Making the load heavier on SLS and Small.

Antonym · 5 Re: Monetary Policy Review next Tuesday Fri Oct 11, 2013 3:08 pm

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Backstage wrote:Don't know about "everybody" I posted this as I was wondering if it was only me, as the usual pre announcement hype doesn't seem to be there. CBSL seems to be cavalier about growth forecast for this year. Do they know something that we don't ? I expect mediocre results from most companies last quarter. Is it going to be inflows into infrastructure that is going to spur the growth ? Or access to Chinese market for our exports?

In July this year, Cabraal had indicated that CBSL might cut short-term interest rates again in September or October if inflation continues to fall as expected. He said, “If we feel very confident with the events of the next few months, then we would feel a little more inclined to relax further... It will be a decision that will be taken around September, October.”

Realistically, the country will grow by upto 6.8%~7.0% during 2013 (which is not bad by any standards). The CBSL has to project a rosier picture to the external audience, and will forecast a higher figure than that.

sriranga · 6 Re: Monetary Policy Review next Tuesday Fri Oct 11, 2013 3:21 pm

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I guess between 50 -100 basis points reduction this time.

Slstock · 7 Re: Monetary Policy Review next Tuesday Fri Oct 11, 2013 3:30 pm

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Hmm, 100 might trigger a big reaction at CSE but not sure 100 at one go is too much. On the other side we know how CB likes to act.

Other possibilities :

I think 25-50 would be good .
But several paced out 25s is a possibility to consider if they think that way
Btw, if their goals is to make IMF happy , they will need to hold rates for longer. ( no change)

sriranga wrote:I guess between 50 -100 basis points reduction this time.

Last edited by slstock on Sat Oct 12, 2013 4:09 am; edited 2 times in total

traderathome · 8 Re: Monetary Policy Review next Tuesday Fri Oct 11, 2013 3:49 pm

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Antonym wrote:If everyone is expecting a 25 basis points reduction, I guess the market has already factored it into share prices.
Old Trading Strategy: "Buy the rumor, sell the news."

yeah you are right in one sense, the problem is in cse news driven trading has long way to go other than court cases etc on speculative shares, due to low liquidity.
look at DIPD did not see major losses in share price when they signed a MOU yesterday, which states closure of the factory in 6 months.
for a long term investor news sensitiveness would be a low key importance, so not much of a worry.

looking at past gains the S&P made ...I am pretty sure the news was out long ago imo as well.so it would be a matter of completing the trades with a slight push and sell off, then tongue

Antonym · 9 Re: Monetary Policy Review next Tuesday Fri Oct 11, 2013 9:44 pm

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Considering our higher growth trajectory, Sri Lanka's stock market should be trading at a P/E Ratio that is roughly 15% higher than the P/E Ratio of developing nations as a group (which is 10.7x). By that reckoning, P/E Ratio 12.3x is what the ASPI should be at.

It is currently at 12.05x, which means there is already some upside potential.
http://mobile.bloomberg.com/quote/CSEALL%253AIND

I believe that the ASPI should be soaring above 6,000 soon. The trigger should come on Oct 15, when the Monetary Policy Review is released at 7:30 AM. I would like to see an aggressive 50 bps reduction in policy rates (which would accelerate the growth momentum), but who knows? CBSL might even leave the rates unchanged for now...

traderathome · 10 Re: Monetary Policy Review next Tuesday Sat Oct 12, 2013 2:06 am

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Antonym wrote:Considering our higher growth trajectory, Sri Lanka's stock market should be trading at a P/E Ratio that is roughly 15% higher than the P/E Ratio of developing nations as a group (which is 10.7x). By that reckoning, P/E Ratio 12.3x is what the ASPI should be at.

It is currently at 12.05x, which means there is already some upside potential.
http://mobile.bloomberg.com/quote/CSEALL%253AIND

I believe that the ASPI should be soaring above 6,000 soon. The trigger should come on Oct 15, when the Monetary Policy Review is released at 7:30 AM. I would like to see an aggressive 50 bps reduction in policy rates (which would accelerate the growth momentum), but who knows? CBSL might even leave the rates unchanged for now...

momentarily it should, that means the steady flow of funds will be channeled to equity based investments. but this process might take some more time to see the real effect in CSE know.as long as there is a longterm plan in this regard, we should be ok.

rainmaker · 11 Re: Monetary Policy Review next Tuesday Sat Oct 12, 2013 7:52 am

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How far can rates go down? The FX is overvalued compared to other Asian countries

traderathome · 12 Re: Monetary Policy Review next Tuesday Sat Oct 12, 2013 12:59 pm

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Antonym wrote:Considering our higher growth trajectory, Sri Lanka's stock market should be trading at a P/E Ratio that is roughly 15% higher than the P/E Ratio of developing nations as a group (which is 10.7x). By that reckoning, P/E Ratio 12.3x is what the ASPI should be at.

It is currently at 12.05x, which means there is already some upside potential.
http://mobile.bloomberg.com/quote/CSEALL%253AIND

I believe that the ASPI should be soaring above 6,000 soon. The trigger should come on Oct 15, when the Monetary Policy Review is released at 7:30 AM. I would like to see an aggressive 50 bps reduction in policy rates (which would accelerate the growth momentum), but who knows? CBSL might even leave the rates unchanged for now...

Current Market P/E slightly higher as per capital trust and well above 12.3 if remember correctly Sad

sriranga

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* Policy decision due Tuesday, Oct. 15 at 7:30 am (0200 GMT)

* Central bank has cut policy rates 75 bps since December

COLOMBO, Oct 14 (Reuters) - Sri Lanka's central bank is expected to keep its key monetary policy rates steady on Tuesday, a Reuters poll showed, after lowering them by 75 basis points since December.

The central bank reduced commercial banks' statutory reserve ratio by two percentage points from July 1, and cut its main policy interest rates by 50 basis points (bps) in May and 25 bps in December.

The island nation's central bank governor has said the monetary policy stance for 2013 would lean more towards easing than tightening.

Following are the poll's forecasts for where rates will be after Tuesday's announcement:

Monetary Policy Review next Tuesday Reuter10

http://in.reuters.com/article/2013/10/14/srilanka-economy-rates-idINL3N0I41AY20131014

Slstock · 14 Re: Monetary Policy Review next Tuesday Tue Oct 15, 2013 10:00 am

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So we did find out how CB likes to act.

slstock wrote: On the other side we know how CB likes to act.

Other possibilities :

I think 25-50 would be good .
But several paced out 25s is a possibility to consider if they think that way
Btw, if their goals is to make IMF happy , they will need to hold rates for longer. ( no change)

sriranga wrote:I guess between 50 -100 basis points reduction this time.

traderathome · 15 Re: Monetary Policy Review next Tuesday Tue Oct 15, 2013 10:07 am

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Market is RED......
Something big is going to happen IMO

stockup&down · 16 Re: Monetary Policy Review next Tuesday Tue Oct 15, 2013 10:41 am

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traderathome wrote:Market is RED......
Something big is going to happen IMO

No TAH it's starting in green

Slstock · 17 Re: Monetary Policy Review next Tuesday Tue Oct 15, 2013 10:50 am

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TAH, just posted the below ...
http://forum.srilankaequity.com/t31200-cse-and-future#183955

traderathome wrote:Market is RED......
Something big is going to happen IMO

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Monetary Policy Review next Tuesday

1 Monetary Policy Review next Tuesday Fri Oct 11, 2013 11:33 am

Backstage

2 Re: Monetary Policy Review next Tuesday Fri Oct 11, 2013 12:24 pm

Slstock

3 Re: Monetary Policy Review next Tuesday Fri Oct 11, 2013 1:45 pm

Antonym

4 Re: Monetary Policy Review next Tuesday Fri Oct 11, 2013 2:15 pm

Backstage

5 Re: Monetary Policy Review next Tuesday Fri Oct 11, 2013 3:08 pm

Antonym

6 Re: Monetary Policy Review next Tuesday Fri Oct 11, 2013 3:21 pm

sriranga

7 Re: Monetary Policy Review next Tuesday Fri Oct 11, 2013 3:30 pm

Slstock

8 Re: Monetary Policy Review next Tuesday Fri Oct 11, 2013 3:49 pm

traderathome

9 Re: Monetary Policy Review next Tuesday Fri Oct 11, 2013 9:44 pm

Antonym

10 Re: Monetary Policy Review next Tuesday Sat Oct 12, 2013 2:06 am

traderathome

11 Re: Monetary Policy Review next Tuesday Sat Oct 12, 2013 7:52 am

rainmaker

12 Re: Monetary Policy Review next Tuesday Sat Oct 12, 2013 12:59 pm

traderathome

13 POLL-Sri Lanka c.bank seen keeping rates steady on Tuesday Mon Oct 14, 2013 8:55 pm

sriranga

14 Re: Monetary Policy Review next Tuesday Tue Oct 15, 2013 10:00 am

Slstock

15 Re: Monetary Policy Review next Tuesday Tue Oct 15, 2013 10:07 am

traderathome

16 Re: Monetary Policy Review next Tuesday Tue Oct 15, 2013 10:41 am

stockup&down

17 Re: Monetary Policy Review next Tuesday Tue Oct 15, 2013 10:50 am

Slstock

18 Re: Monetary Policy Review next Tuesday

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