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Sri Lanka Equity Forum » Stock Market Talk » Expert Chamber » Why am I so pessimistic about Sri Lanka's Equity Market

Why am I so pessimistic about Sri Lanka's Equity Market

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sriranga


Co-Admin
@K.Haputantri wrote:
@WildBear wrote:In Sri Lanka experience, Equities out performed other asseet classes in past 30 years as well as past 3 years.

I consider the Sri Lanka experience as an exception, solely driven by factors out-side fundamandals. Its emense growth during the past three years is clearly out-of-propotion with the growth of earnings of companies and the GDP. "Rain of money" (from where no one knows) just after the end of the war triggerred the upword trend but it was difficult to sustain such abnormal hights once the "rain of money" ceased. Many poor investors were cought in between unawares in the rat race. No one should expect similar trends in the near future. This is the bitter truth.

Therefore, investor education is the key to success of the share market in the future. That is why I appreciate the post of Quibit which can guide the investors asfer in to the arena of stock market.

There is a quote, may be give a clear picture of the past.(2009-2011)

"There’s a strange thing goes on inside a bubble. It’s hard to describe. People who are in it can’t see outside of it, don’t believe there is an outside."
Lucy Prebble

http://sharemarket-srilanka.blogspot.co.uk/

K.Haputantri


Co-Admin
Very true Shri, but many do not understand the reality. That is where continous education is necessary.

Tiger


Assistant Vice President - Equity Analytics
Assistant Vice President - Equity Analytics
I am not so bearish, once exchange rate etabilises will buy more. Hopefully by third week of Feb. However I think that Greece will leave Euro in March-April causing ripples around the world, the impact of which to SL would be flight of capital out of SL. Sanctions on Iran can cause further devaluation of rupee, I believe that in a free ex-rate policy environment market will factor that in advance before it happens.

I am cautiously optimistic on CSE, the down turn below 6000 is another round of panicking and opportunity.

rijayasooriya


Senior Vice President - Equity Analytics
Senior Vice President - Equity Analytics
@WildBear wrote:
@anubis wrote:Out of curiosity, is "Quibit" a single person's identity or that of a collective / company? If it's the latter, that would explain the variation of posts.

(@Robiticfx: how do you know it's a "she"?)

In any case, I'm not against promotions / demotions / opinions (specially if they are backed by sensible arguments like this one). Just found this one interesting since it's coming from the site admin.

Cheers!

We Should not forget that, This forum is a Business, and all the Administrators/Moderators have a role to play in order to satisfy their stakeholders/shareholders/managers. Some times the posts of Administrators/Moderators may reflect the opinions/wishers of the stakeholders/share holders etc. At the same time all readers should understand that one person can have many accounts and at the same there are may be many people behind one user name.

However it's always good to have different ideas to discuss for a better readership. In above topic Quibit has some valid points, If we can get risk free 15 % p.a. gain why we should take risks specially when the Global Economic picture is gloomy ?
Well...Well...Well....I almost agree with ur opinion but let me correct ur opinion of "all the moderators have a role to play in order to satisfy their stakeholders/shareholders/managers" as ALL the moderators do not have to play a such a role .
(This does not mean that some moderators have a role to play bla bla bla.....but as I do not know about all the moderators,to be in the saferside Wink I mention it like that.)

Kumar


Senior Vice President - Equity Analytics
Senior Vice President - Equity Analytics
[quote="rijayasooriya
Well...Well...Well....I almost agree with ur opinion but let me correct ur opinion of "all the moderators have a role to play in order to satisfy their stakeholders/shareholders/managers" as ALL the moderators do not have to play a such a role .
(This does not mean that some moderators have a role to play bla bla bla.....but as I do not know about all the moderators,to be in the saferside Wink I mention it like that.)[/quote]

I too agree with Rijay.

Quibit

Quibit
Senior Vice President - Equity Analytics
Senior Vice President - Equity Analytics
First real reaction to the impending crisis outlined in my post. What can we expect on Monday trading?

Oil prices will be revised from tonight but concessions will be given to pvt and public transport and fishery sectors- Govt info - adaderana.lk

Liter of petrol increased by Rs 12, diesel by Rs 31, Kerosene by Rs 35 with effect from midnight today- Ministry of Petroleum- adaderana.lk

lokuayya


Senior Manager - Equity Analytics
Senior Manager - Equity Analytics
fuel price hike will cause huge inflation.even 15% interest rate would not be enough .after some time money has no value.
best option may be property ,or property rich shares,

smallville

smallville
Associate Director - Equity Analytics
Associate Director - Equity Analytics
Greedy is right.. only 5 year deposits look promising at the moment.

What if you buy shares cheaper in this market? It will give u 100% return in 5 years as oppose to these FD rates..

sriranga

sriranga
Co-Admin
Fuel price hike will definitely lead the country to devaluation.
May be in month time.
No choice after CB stopped defending the Rupee.

http://sharemarket-srilanka.blogspot.co.uk/

rishanpossitive


Manager - Equity Analytics
Manager - Equity Analytics
Time to go to road. Twisted Evil Twisted Evil

Tiger

Tiger
Assistant Vice President - Equity Analytics
Assistant Vice President - Equity Analytics
@rishanpossitive wrote:Time to go to road. Twisted Evil Twisted Evil

To live? I suppose there would be many to follow you.

rishanpossitive


Manager - Equity Analytics
Manager - Equity Analytics
@Tiger wrote:
@rishanpossitive wrote:Time to go to road. Twisted Evil Twisted Evil

To live? I suppose there would be many to follow you.

No friend,For revolution.That's the only way market can go up.

Kumar

Kumar
Senior Vice President - Equity Analytics
Senior Vice President - Equity Analytics
@rishanpossitive wrote:
@Tiger wrote:
@rishanpossitive wrote:Time to go to road. Twisted Evil Twisted Evil

To live? I suppose there would be many to follow you.

No friend,For revolution.That's the only way market can go up.

Revolution in Srilanka Hahahahaha......
You are dreaming.
We need to have the guts for any action or reaction.

sapumal


Vice President - Equity Analytics
Vice President - Equity Analytics
15% is only for senior persons, we can't get that. Am I correct ?

Kumar

Kumar
Senior Vice President - Equity Analytics
Senior Vice President - Equity Analytics
Further to Quibits 3 points the following point make much weight in the investments in Srilanka.
Please read the following news in dailymirror.lk



Police and political parties most corrupt, survey reveals
SATURDAY, 11 FEBRUARY 2012 18:09
According to a survey by Transparency International (TI) nearly 50% of Sri Lankans believed that the police and political parties in the country were the most corrupt institutions in the country.

In April 2011, 1000 people were interviewed from Sri Lanka and other countries in the South Asian including India, Nepal, Pakistan, Maldives and Bangladesh to determine the level of corruption in each country.

The survey showed that the people had the least amount of confidence in services provided by the police. The survey showed that there was a dire lack of confidence in the services provided by other government departments.

“Apart from the lack of confidence of the people in the police system, the survey also indicates that in Sri Lanka corruption was most prevalent in the Inland Revenue Department, Customs Department and land services such as divisional secretaries, kachcheries, pradeshiya saba, the Land Registrar’s Department and other such government services,” a TI Spokesman Shan Wijeytunge said.

This list was followed by the judiciary and education and health care services. Out of those who were interviewed 23% said they had to pay a bribe in order to obtain a particular service.

The overall results of the research in South Asia showed that corruption in government departments were highest in Bangladesh at 66% and the lowest in Maldives at 6%. (Olindhi Jayasundere)

Don't you feel shame?



Last edited by Kumar on Sat Feb 11, 2012 11:24 pm; edited 1 time in total

UKboy

UKboy
Senior Vice President - Equity Analytics
Senior Vice President - Equity Analytics
@rishanpossitive wrote:
@Tiger wrote:
@rishanpossitive wrote:Time to go to road. Twisted Evil Twisted Evil

To live? I suppose there would be many to follow you.

No friend,For revolution.That's the only way market can go up.

Ammo Brother I beg you. Please do NOT go for a picketing. It will make things worse. Sad

Tiger

Tiger
Assistant Vice President - Equity Analytics
Assistant Vice President - Equity Analytics
@Kumar wrote:
@rishanpossitive wrote:
@Tiger wrote:
@rishanpossitive wrote:Time to go to road. Twisted Evil Twisted Evil

To live? I suppose there would be many to follow you.

No friend,For revolution.That's the only way market can go up.

Revolution in Srilanka Hahahahaha......
You are dreaming.
We need to have the guts for any action or reaction.

Revolution? Truth of the matter is we are still a very poor country because of this revolutionists who emerged from time to time since 1948. Revolutions cannot create wealth only Education, Discipline and Hardwork can create wealth.

Anyway please explain "For revolution.That's the only way market can go up", this. I may be not seen what you mean. If certain revolutionary actions can send markets up I would certainly rally with you.

මාර්කට් එක වහාම උඩ යවපියව්. (support from me)

sriranga

sriranga
Co-Admin
@Tiger wrote:
@Kumar wrote:
@rishanpossitive wrote:
@Tiger wrote:
@rishanpossitive wrote:Time to go to road. Twisted Evil Twisted Evil

To live? I suppose there would be many to follow you.

No friend,For revolution.That's the only way market can go up.

Revolution in Srilanka Hahahahaha......
You are dreaming.
We need to have the guts for any action or reaction.

Revolution? Truth of the matter is we are still a very poor country because of this revolutionists who emerged from time to time since 1948. Revolutions cannot create wealth only Education, Discipline and Hardwork can create wealth.

Anyway please explain "For revolution.That's the only way market can go up", this. I may be not seen what you mean. If certain revolutionary actions can send markets up I would certainly rally with you.

මාර්කට් එක වහාම උඩ යවපියව්. (support from me)


Revolutions cannot create wealth only Education, Discipline and Hardwork can create wealth.


1000 times agree with you.
Thanks.

http://sharemarket-srilanka.blogspot.co.uk/

rijayasooriya

rijayasooriya
Senior Vice President - Equity Analytics
Senior Vice President - Equity Analytics
කොහොම උනත් දැන් හැමෝටම වගේ කෙලවිලා තියෙන බව නම් පේනවා

CSE.SAS

CSE.SAS
Global Moderator
In addition to the above, please read this article published in Sundaytimes 12-02-2012(tomorrow).

http://forum.srilankaequity.com/t15808-sri-lanka-newspapers-sunday-12-02-2012#103328


Why am I so pessimistic about Sri Lanka's Equity Market - Page 2 Epaper11

Sri Lanka's upscale business community has put a damper on any buoyancy in economic growth this year with a new poll expressing concern over the deteriorating local and international business climate in 2012.

According to a Business Outlook Survey 2012 issued by the Ceylon Chamber of Commerce (CCC) in January, the situation regarding two critical areas - decision to invest this year and the economic environment - worsened in December 2011 against July 2011 when the previous study was done.

Respondents were asked whether they will invest, will not invest or are undecided. In December, 62 % said they will invest, down from 74% in July; 15% said they will not invest up from 8% while 23% were undecided against 18% (July). Asked about the economic environment in Sri Lanka for the next 12 months, 63% of the respondents said there was no change against 43% in July while only 21% said there had been an improvement against 57% earlier.

The internal survey, a copy of which the Business Times received unofficially, was aimed at obtaining an independent assessment of the business environment and the challenges encountered by Sri Lankan corporates. It covered key business sectors in Sri Lanka from Agriculture, Industry and Services such as Agriculture, Agro Processing, Banking & Finance, Food & Beverages, IT & BPO, FMCG, Plantation, Retail, Travel & Tourism, etc and was addressed to the business leaders covering SMEs to MNCs.

The mood worsened after notorious expropriation laws were introduced. Respondents asked for their perception of these laws, voted "Not Favourable (73%), Favourable (4%) and No Impact (23%)". Then asked about reconsideration of the business/investment decision based on these laws, 33% said they will reconsider, 40% said NO while 27% were undecided. Another revealing statistic was the ranking given to most positive (factors) and most negative factors. While there was hardly any change (from July to December) in the most positive factors (on a 1-5 scorecard) and comprising peaceful environment, improved infrastructure, cost of finance, improved access to finance and more transparent and consistent, the most negative ranking saw 'Abrupt/adhoc changes to laws and regulations' move one notch up to 1st place from 2nd place in July.

On average consumer prices, 69% of the respondents said it will increase (33% in July) while 31% said there was no change against 67%, six months ago. On interest rates, 51% said no change (95% earlier) while 47% said it would increase (3% earlier). The survey quoted 58% of the respondents saying salaries and wages in industry will rise (56% earlier), while industry profits would decline (27% respondents vs 55% earlier). On global economic conditions for the next 12 months, 2% of the respondents said it would improve, down from 14%; 29% said it would decline (47%earlier) while 57% said no change (51% earlier).

Commenting on the results of this survey, top economist, Prof. Sirimal Abeyratne from the University of Colombo said, the results were interesting but not surprising. He said there was a gloomy global economic outlook with the Euro crisis no more a crisis in the Euro Zone, but in the global economy.
He said the business environment of Sri Lanka needs to be strengthened through a reform process, but in practice it appears to have got damaged.

"Although the government's main policy document - Mahinda Chintana - presents a beautiful economic vision and conceptualization about the medium-term achievements of the Sri Lankan economy, there has been a huge vacuum in the mission and action plan. In certain instances, in fact, we could observe policy reversals as well as ad hoc policy changes, sending negative signals to the business community.
The business community wishes to see the policy direction of the country and, consistency and predictability of the policy environment," he said. A few bankers and industrialists polled by the Business Times had this to say:

- In addition to the macro economic issues, policy reversal is also a problem.
- Sri Lanka should have depreciated its currency two years ago and now the situation has worsened as the government failed to keep to its promises in the IMF SBA deal (flexible exchange rate policy/break-even in CEB and CPC)
- The market understands the situation much better (than the government) and is aware that the interest rates and foreign exchange rates are artificial.
- Policy reversals: the pensions pull back, the crates issue reversal, private university bill withdrawal and the expropriation law issues have sent negative signals and conflicting signals. The country can't attract investment under this environment.
http://sundaytimes.lk/120212/BusinessTimes/bt01.html

rishanpossitive


Manager - Equity Analytics
Manager - Equity Analytics
@Tiger wrote:
@Kumar wrote:
@rishanpossitive wrote:
@Tiger wrote:
@rishanpossitive wrote:Time to go to road. Twisted Evil Twisted Evil

To live? I suppose there would be many to follow you.

No friend,For revolution.That's the only way market can go up.

Revolution in Srilanka Hahahahaha......
You are dreaming.
We need to have the guts for any action or reaction.

Revolution? Truth of the matter is we are still a very poor country because of this revolutionists who emerged from time to time since 1948. Revolutions cannot create wealth only Education, Discipline and Hardwork can create wealth.

Anyway please explain "For revolution.That's the only way market can go up", this. I may be not seen what you mean. If certain revolutionary actions can send markets up I would certainly rally with you.

මාර්කට් එක වහාම උඩ යවපියව්. (support from me)

REVOLUTION TO KICK OUT _ _

Kumar

Kumar
Senior Vice President - Equity Analytics
Senior Vice President - Equity Analytics
@rishanpossitive wrote:
@Tiger wrote:
@Kumar wrote:
@rishanpossitive wrote:
@Tiger wrote:
@rishanpossitive wrote:Time to go to road. Twisted Evil Twisted Evil

To live? I suppose there would be many to follow you.

No friend,For revolution.That's the only way market can go up.

Revolution in Srilanka Hahahahaha......
You are dreaming.
We need to have the guts for any action or reaction.

Revolution? Truth of the matter is we are still a very poor country because of this revolutionists who emerged from time to time since 1948. Revolutions cannot create wealth only Education, Discipline and Hardwork can create wealth.

Anyway please explain "For revolution.That's the only way market can go up", this. I may be not seen what you mean. If certain revolutionary actions can send markets up I would certainly rally with you.

මාර්කට් එක වහාම උඩ යවපියව්. (support from me)

REVOLUTION TO KICK OUT _ _

Still dreaming is not prohibited in Sri Lanka no?

LateTackle

LateTackle
Senior Equity Analytic
Senior Equity Analytic
@smallville wrote:Greedy is right.. only 5 year deposits look promising at the moment.

What if you buy shares cheaper in this market? It will give u 100% return in 5 years as oppose to these FD rates..


If you buy at the correct time, I remember JKH at 60 and NDB at 70 your return will be more than 300% FD returns will never give you that type of return, if you want to make big money you have to wait for these blessings in diguise.

Every dark cloud has a silver lining. Idea Like a Star @ heaven

Quibit

Quibit
Senior Vice President - Equity Analytics
Senior Vice President - Equity Analytics
This is why I was so pessimistic about the Sri Lanka's Stock Market.
Look at the change.

A) Sri Lankan rupee already down to Rs 122
B) Interest rate is still on it's way up 12.5% offed by NTB for 3 months and 16% offered by Pan Asia for 5 year.
C) Petrol, Diesel and Kerosine have hit the roof to be followed by LPG.
D) electricity tariff up 40% and bus fares up considerably.
E) ASI reached below 5,000 during trading.
F) inflation doom to be double digit

What's is next!!!
Higher corporate And income tax?

FXX

FXX
Senior Manager - Equity Analytics
Senior Manager - Equity Analytics
LOLC Securities Research Report suggested banks as a good buy and the other good news is speculative shares going down but foreigners are collecting fundamentally strong blue chip companies, investing 50 on FD's and 50 on bank shares seems good option but finding the bottom of the market seems not easy

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