Which sector next ?

notme · 1 Which sector next ? Tue Mar 19, 2013 4:39 pm

notme

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banking sector has already shown substantial growth . which sector next and when ? study

Rapaport · 2 Re: Which sector next ? Tue Mar 19, 2013 6:42 pm

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Nothing but Banks for the moment...

Manufacturing : Pending Electricity prices to go up
Plantations : Pending Wage hike, middle east crisis, poor global marketing
Hotels : No real spending tourists, high renovation costs, high PE
Motor : Sector is paying for govt blunders & anti Indian import stance
http://www.dnaindia.com/money/report_geopolitics-may-hurt-bajaj-in-lanka_1812865
Telecom : Heavy infrastructure expenditure, price wars
Finance : Lack of new vehicle registration, absurd interest rates, default risk
Food & Beverage: high inflation, govt interference with pricing and supply

To top it up,

Exhaustion of retail players, disgust
Communal tension by BBS
Risk of sudden policy changes, corruption and waste
UN human rights cases
Anti Western stance
Global economic instability and commodity price fluctuations

And guess what?? Increasing energy prices only reduces loses to CEB and CPC and these companies still run at a loss after price revision
This can lead to further price increases to such a point that either people will not use electricity or will find it cheaper to run a generator than paying CEB for its wastage/corruption! Its absurd!
http://www.island.lk/index.php?page_cat=article-details&page=article-details&code_title=74935

These are some issues not favourable for other sectors

Banks preferred,
Good profits, supporting never ending credit growth and interest income.
Less interference by private and govt entities
Good liquidity, dividens and scripts
Less likely for sudden taxation
Expectation of a good performance in the next 2 years, cheap

Harry82 · 3 Re: Which sector next ? Wed Mar 20, 2013 6:22 am

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Non banking Instutions , banks

Oracle797 · 4 Re: Which sector next ? Wed Mar 20, 2013 8:23 am

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I believe banking sector also now at the maturity level.In order to survive banks have to lend for other industries. If other industries and normal population are struggling, banks will also suffer.I don't think in next year bank will not that good as this time. There will be less investments carried out by other industries such as manufacturing , power and energy due to economic crisis and high interest rates. There will be always indirect impact to the banks as well.

worthiness · 5 Re: Which sector next ? Wed Mar 20, 2013 9:43 am

worthiness

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Overall review on industrial sector is must to initiate to promote the investment in variety of industries particularly covering small & medium size enterprises. Financing structure is to be reformulated through banking sector with a aim of promoting existing industries while attracting new investors for newly designed manufacturing process. Tax concessions on export oriented products are to be revisited for encouraging the manufacturers while finding the emerging markets for such products not depending on western countries. Such schemes in macro level effortlessly get involved the banking & financing sector adding more value added activities.
I guess current trend in banking sector will slowly moving up with strong counters & they shall be further pushed up after the festive season together with first quarter performance.

The Alchemist · 6 Re: Which sector next ? Wed Mar 20, 2013 1:20 pm

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Oracle797 wrote:I believe banking sector also now at the maturity level.In order to survive banks have to lend for other industries. If other industries and normal population are struggling, banks will also suffer.I don't think in next year bank will not that good as this time. There will be less investments carried out by other industries such as manufacturing , power and energy due to economic crisis and high interest rates. There will be always indirect impact to the banks as well.

Good Observation ! Persistent high Inflation leads to prolonged periods of high Interest rates. The dual mandate of trying to bring down interest rates while controlling the exchange rate (not allowing it to depreciate much) does not seem to be working. If their are prolonged periods of credit expansion in a high interest rate environment, cracks will appear in the banking system too. we already see this in some Finance Companies, maybe for different reasons.

http://forum.srilankaequity.com/t26693-economic-growth-cannot-be-sustained-with-exports-falling-economists#156386

Above is a very good article that explains all the macro-economic inter-relationships.

Last edited by The Alchemist on Wed Mar 20, 2013 2:10 pm; edited 1 time in total (Reason for editing : included link to another thread)