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I read posts saying the one reason for the downturn in the CSE is because of IPOs and people talk about them negatively.
We are fishing in a small puddle of water and lots of fishermen are fishing in this small puddle of 200 or so fish from which most are just small sprats and very few big fish. We need more and more fish.
To give an example where we are, compare the market size with one of the exchanges of our neighbor.
Colombo USD 22,000,000,000
Bombay USD 1,630,000,000,000
We're about 0.014%
Not even 1%! 1/100 of a 1%!
And that's what these IPOs will add. It doesn't even matter having stocks locked up in companies. We need more and more liquid stocks like DIAL, COMB, SLTL, JKH...
People talk about fundamental stocks. Actually JKH, SPEN, PCH, ... are all good stocks. The problem is the price we pay for them. Some blue chip companies are going at 50 times its earnings. That has to come to a reasonable price. From the recent reports the companies did not show immense profits. That's not even practical. And this year it's going to be tough for every company.
Foreign investments are directly investing in the country not through buying expensive shares. May be they may offer shares for us to buy someday through IPOs.
We are fishing in a small puddle of water and lots of fishermen are fishing in this small puddle of 200 or so fish from which most are just small sprats and very few big fish. We need more and more fish.
To give an example where we are, compare the market size with one of the exchanges of our neighbor.
Colombo USD 22,000,000,000
Bombay USD 1,630,000,000,000
We're about 0.014%
Not even 1%! 1/100 of a 1%! And that's what these IPOs will add. It doesn't even matter having stocks locked up in companies. We need more and more liquid stocks like DIAL, COMB, SLTL, JKH...
People talk about fundamental stocks. Actually JKH, SPEN, PCH, ... are all good stocks. The problem is the price we pay for them. Some blue chip companies are going at 50 times its earnings. That has to come to a reasonable price. From the recent reports the companies did not show immense profits. That's not even practical. And this year it's going to be tough for every company.
Foreign investments are directly investing in the country not through buying expensive shares. May be they may offer shares for us to buy someday through IPOs.
Last edited by wis on Sun Mar 13, 2011 9:12 pm; edited 1 time in total
