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In search of attractive FUTURE SECTORS

5 posters

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1In search of attractive FUTURE SECTORS Empty In search of attractive FUTURE SECTORS Thu Jun 30, 2011 11:36 am

RichDad

RichDad
Manager - Equity Analytics
Manager - Equity Analytics

Dear All,

What are the sectors you identify as prospective in the forth coming quarters and years?

I have identified a few

1. Power and energy (alternative Power such as Hydro, Solar and Wind)
The whole country and the world is rapidly developing and oil reserves are depreciating at a rate and no new oil reserves are discovered. Oil prices will rise and the importance of the alternative energies will rise as mankind will never stop developing. To support the rapid development above energy sources will have to be developed in the future. For sure this sector is going to shine.

2. Hotels and Travels
With the liberation, attractiveness of the country as a tourist destination has risen. Country's developments and investments in this sector will back this hike.
But there are negatives as well, government regulations of minimum hotel charges will discourage some tourist segments and the unemployment and economic instability of the West might put down the disposable income of the potential tourists.

3. Information Communication Technology
Development of the country ought to be backed by improved IT infrastructure. SL is still in a primary stage when IT literacy is concerned compared to the developed part of the world, hence this sector will have good prospects in the future with holdings like PC House taking the initiative. The entire world is digitizing and networking and there fore IT sector will have prospects in the country in all short, medium and long term.
FYI http://www.dailynews.lk/2011/06/28/bus24.asp

4. Construction and engineering
With the liberation of N&E and with the development of infrastructure and other noncurrent assets country will have more and more construction projects coming in the future. Public and private sector will have to tie up with the foreign players as well to optimize the output. But we should keep in mind that these developments are very vulnerable to the political situation in the country. Therefore we might need to concentrate more in short and medium term rather than the long term investments in this sector.
http://sundaytimes.lk/110626/News/nws_01.html

FYI http://www.ft.lk/wp-content/uploads/file/DFT-12(9).jpg

What do you all think as emerging industries?

2In search of attractive FUTURE SECTORS Empty Re: In search of attractive FUTURE SECTORS Thu Jun 30, 2011 12:35 pm

kam2011


Senior Manager - Equity Analytics
Senior Manager - Equity Analytics

Imasha, Good effort. I would like to add Two other sectors;
Agri. related items.
Since Govt has given higher priority for Agriculture, farmers have increased all cultivation activities and the price for most of the items are also good. Therefore Farmers demand for more chemical products(pesticide etc),fertilizer, agriculture appliances,tractors and other equipment etc etc.Hence I believe manufacturing and distributing agencies of such products will have a bright future.
Consumer products
Since we have become a fast growing economy with over 8% GDP growth rate, Income of the people is rapidly increasing now.Due to health reasons tea is now becoming more popular in the world. Furthermore with recent price rise in oil world market price of urbber also gone up. Therefore not only large plantation companies but also small holders as well as estate workers have been benefited.Further,Large number of people in North and East who were not employed in the war time are now engaged in economic activities and earn money. On the other hand young people of those areas who are working abroad are now sending money without fear and also start businesses. Therefore demand for consumer items such as food & beverages,garments,foot ware,sewing machines ,bicycles, electronics & electrical articles etc have been increased rapidly.Hence future of the manufactures and distributers of those items too would be bright.

anubis


Senior Manager - Equity Analytics
Senior Manager - Equity Analytics

"PC House taking the initiative" lol!

(sorry, couldn't resist)

Investor99


Manager - Equity Analytics
Manager - Equity Analytics

The most of the hotel shares are overvalued and the deepening financial crisis in Greece and the involvement of EU in the bailout will reduced the number of quality tourist (high spending) arrivals, so in my opinion the hotel and tourism sector will not be attractive in the near future.

Please do your own analysis as this is not a buy/sell/hold decision.

kam2011


Senior Manager - Equity Analytics
Senior Manager - Equity Analytics

Yes investor99, I too have noted the point you mentioned. As per media no significant increase in western tourists. However as a total number of tourists a considerable growth has been recorded but mostly Indians who are coming for shopping..

RichDad

RichDad
Manager - Equity Analytics
Manager - Equity Analytics

kam2011 thanks for the input and I like the way you think connecting different industries and how each impacts on the other.

Investor99 totally agree with you. It's over valued. But still I think there is enough space in the long term for the sector to grow as SL is going to be one of the top attractions with the current developments led by Dr. Godahewa.

anibus dude!!! what makes you laugh!! hahaha.. lol

7In search of attractive FUTURE SECTORS Empty Re: In search of attractive FUTURE SECTORS Thu Jun 30, 2011 11:15 pm

Investor99


Manager - Equity Analytics
Manager - Equity Analytics

Yes in the long term that’s during the next three to five years the hotel sector should boom and we have to be innovative and maintain high standards to attract all segments of tourist as there is going to be completion from Asian countries like Singapore, Malaysia, Thailand, Indonesia, Maldives etc and also some Eastern European destinations that offer cheap vacation.

Please do your own analysis as this is not a buy/sell/hold decision.

8In search of attractive FUTURE SECTORS Empty Re: In search of attractive FUTURE SECTORS Fri Jul 01, 2011 12:09 am

RichDad

RichDad
Manager - Equity Analytics
Manager - Equity Analytics

Yes we will have to manage the competition well.
Short term of the industry may not look good with poor earning calls as we are going through the off-peak season.
However since the prices of certain counters such as AHUN have bottomed down it may be a good opportunity to accumulate.

Low disposable income of certain segments has been caused by the economic instability in the West. A shift in the demand can be identified to MICE tourism (Meetings, Incentives, Conferencing, Exhibitions) Entertainment and night life centric tourism from the conventional sea, sand and surf tourism. I've heard Dhammika Perera is going to start the next Ballys casino at Bentota equipped with modern tech to attract the night life segment.

However SL political environment should be stable and more quality hotels need to be introduced to cater the boom whilst uplifting the standards of the existing hotel facilities which is happening already. And government should encourage the investors through tax concessions etc. We should compete with the countries you mention such as Thailand, Maldives etc through the service quality enhancements since our prices are already on par with theirs.

Good luck

9In search of attractive FUTURE SECTORS Empty Re: In search of attractive FUTURE SECTORS Fri Jul 01, 2011 12:42 pm

Investor99


Manager - Equity Analytics
Manager - Equity Analytics

When you compare Sri Lanka with other countries Sri Lanka has a lot of resources but I don’t see that these resources have been put to the maximum use. I only see is that these resources are being destroyed day by day while other countries protect their resources. One example is that I heard there is a main road going to be built through Wilpattu National park. This is a tourist attraction and one of the asset’s of our country and it is being destroyed for a few to make a profit. There are so many other things that are happening and you and I might not know.Its sad...............

10In search of attractive FUTURE SECTORS Empty Re: In search of attractive FUTURE SECTORS Fri Jul 01, 2011 3:55 pm

Prince

Prince
Senior Manager - Equity Analytics
Senior Manager - Equity Analytics

my intuition says that next four quarters will be dominated by commodity related stocks and Hydro Power stocks. World is to face a food crisis very shortly. And if the middle-east's situation persists for another 3 months we may see the all time highs of commodity prices.

Analyze below sectors and pick the most undervalued stock from each.

Palm Oil
Rubber/Coconut
Food and Beverages
Hydro Power

11In search of attractive FUTURE SECTORS Empty Re: In search of attractive FUTURE SECTORS Fri Jul 01, 2011 7:55 pm

RichDad

RichDad
Manager - Equity Analytics
Manager - Equity Analytics

Prince you have a valuable point there. May I know what counters are attractive in the sectors you highlight.

Following are my picks

Palm Oil - BUKI
Rubber/Coco - KGAL
Food Beverage and tobacco - DIST, BFL
Hydro power - VPEL

Thanks

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