"sudda's money"

notme · 1 "sudda's money" Mon Jan 30, 2012 8:03 pm

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everyone talk about lack of foreign buyers . is it the major reason for the bear marker ? cant we survive without them ? alien

raa · 2 Re: "sudda's money" Mon Jan 30, 2012 11:14 pm

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Yes our market can survive without them. Foreigners invest, book profits and leave until a new wave of foreigners come in..its a cycle. It's a lie to say that we rely on foreign funds... I've stuck by what i've said, that there is more than enough money available locally.

manula · 3 Re: "sudda's money" Mon Jan 30, 2012 11:53 pm

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@raa.. I am also agree with you. No need to wait for forigners.. If CSE can increase the confidence of the market hope many local will start investing. Previousley went market went with boom no one mention/thinking about the forign investros. Same time now we required a big money from instiutional saving like EPF or ETF (To stable the market) and our fernds manipulators also to wake up from the dull market.

raa · 4 Re: "sudda's money" Tue Jan 31, 2012 12:09 am

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Foreign inflows are a positive sign but aren't the foundations that should shake our market. It's a cash inflow that could boost the market temporarily, but at some point, it will translate into a bigger cash outflow.

A sustainable way to provide a cash injection is through sustainable methods. Everyone talks about how good our economy is, but nobody mentions the REAL link between our economy and the stock market. There is no real requirement for the market to move up jsut because the economy is doing well... at the end of the day, it is peoples like you and me who take stocks up.

Stocks operate by demand and supply so how is it that the economy can benefit the market. The only way is via corporate earnings. Corporate earnings should ideally translate into higher dividends. Higher dividends to share holders = higher income. Higher income = more money can be invested into the stock market. The stock market is a place for an alternate investment, just like debentures, fixed deposits, treasury bills, land and has its own risks and rewards.

Last year, our top 20 corporates gave out around Rs. 20bn in dividends. Out of that, around Rs. 15bn went to overseas clients. They represent the smart money... as their investments realise real wealth. We have a lot to learn from them...

manula · 5 Re: "sudda's money" Tue Jan 31, 2012 12:16 am

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raa wrote:Last year, our top 20 corporates gave out around Rs. 20bn in dividends. Out of that, around Rs. 15bn went to overseas clients. They represent the smart money... as their investments realise real wealth. We have a lot to learn from them...

Main thing in this i can see overses clients are going behind the fundmental and they are coming to invest. But our many local investors are coming for gambiling and they want money to increase with in one day. Many are going behind the rallys of crap shares. They came to gamble and get some extra money soon to buy a car or land etc.. not like to invest .

Kumar · 6 Re: "sudda's money" Tue Jan 31, 2012 1:24 am

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manula wrote:

raa wrote:Last year, our top 20 corporates gave out around Rs. 20bn in dividends. Out of that, around Rs. 15bn went to overseas clients. They represent the smart money... as their investments realise real wealth. We have a lot to learn from them...

Main thing in this i can see overses clients are going behind the fundmental and they are coming to invest. But our many local investors are coming for gambiling and they want money to increase with in one day. Many are going behind the rallys of crap shares. They came to gamble and get some extra money soon to buy a car or land etc.. not like to invest .

I do agree with you manula.

Expert · 7 Re: "sudda's money" Tue Jan 31, 2012 1:30 pm

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Great discussion!

This is the type of discussion that benefits those who discuss and even those who watch.

This is the type of discussion that should be promoted here.

Thanks raa and manula. You are really good people. And also 'notme' for starting this.

And the content of your posts here are very informative and thought provoking.

I love this type of thing.

sapumal · 8 Re: "sudda's money" Tue Jan 31, 2012 2:47 pm

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Either Central bank has to print notes or foreign money has to come. you know banks are out of cash. First option is the hardest one ATM

raa · 9 Re: "sudda's money" Tue Jan 31, 2012 3:11 pm

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No. Well given how our market has appreciated unsustainably, these may look like the only two solutions but realistically;

As i mentioned before, without any printing of currency from the central bank, our top 20 corporates paid out Rs. 20bn to shareholders!!! This is real incomes, not credit expansion and besides, the recent credit expansion was only Rs. 8bn.

While foreign money would come in and go out and printing currency would cause all sorts of problems to our economy, here we have a slow and a very real solution. Currently only a fraction of the Rs. 20bn I mentioned above goes to the local shareholders. The remainder goes to foreign shareholders... They can take that money and invest in Sri Lanka, back home or any other country they want, or in return, pay their shareholders.

If we were to follow the smart money all those years instead of chasing useless shares, we would be getting a bigger piece of that Rs. 20bn. That money will go back into the local economy, back into the stock market, back to our local banks as savings... the benefits are great and sustainable.

So while corporates continue to improve earnings, and dish out more and more dividends, the majority of us are in an unfortunate situation of waiting for pony shares to make us quick money and hope someone else can come in and save our market because we have lost the ability to do so.

However I still believe that money IS available in our market and it is just a matter of having patience and letting the market take its course. Eventually shares will fall to a point where earnings (not P/E) and returns will justify the bottoming out and I feel that the ASI will not fall below 5000 as a result.

Expert · 10 Re: "sudda's money" Wed Feb 01, 2012 10:07 am

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raa wrote:No. Well given how our market has appreciated unsustainably, these may look like the only two solutions but realistically;

As i mentioned before, without any printing of currency from the central bank, our top 20 corporates paid out Rs. 20bn to shareholders!!! This is real incomes, not credit expansion and besides, the recent credit expansion was only Rs. 8bn.

While foreign money would come in and go out and printing currency would cause all sorts of problems to our economy, here we have a slow and a very real solution. Currently only a fraction of the Rs. 20bn I mentioned above goes to the local shareholders. The remainder goes to foreign shareholders... They can take that money and invest in Sri Lanka, back home or any other country they want, or in return, pay their shareholders.

If we were to follow the smart money all those years instead of chasing useless shares, we would be getting a bigger piece of that Rs. 20bn. That money will go back into the local economy, back into the stock market, back to our local banks as savings... the benefits are great and sustainable.

So while corporates continue to improve earnings, and dish out more and more dividends, the majority of us are in an unfortunate situation of waiting for pony shares to make us quick money and hope someone else can come in and save our market because we have lost the ability to do so.

However I still believe that money IS available in our market and it is just a matter of having patience and letting the market take its course. Eventually shares will fall to a point where earnings (not P/E) and returns will justify the bottoming out and I feel that the ASI will not fall below 5000 as a result.

You are quite correct raa. I wonder how many here would see the strategy in your suggestion and have the courage to follow it or something similar (a variation from what you have given). But, anyway, everyone is free to choose their way....

manula · 11 Re: "sudda's money" Wed Feb 01, 2012 2:46 pm

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@expert..yes.. it is a very good idea what raa said but practically cannot implement. If you see a one day market behaviour you can see the buying/selling qunattiy of fundmental and crapy shares.

So as we discuss many times to market move required big stable money. Main option i can say EPF/ETF money back in the marekt (But persoanly I dont like the idea of playing with the other pepole money). Other thing is we have to make the confidence of the share marekt again to the investors. Now many investors moved to different investment like lands/FDS/Gold etc..Many big pepole manipulators taken the money after different incidents. If we can take again in to the table no need talk about sudda's money. Actually marekt required all type of pepole.