FINANCIAL CHRONICLE™
Dear Reader,

Registration with the Sri Lanka FINANCIAL CHRONICLE™️ would enable you to enjoy an array of other services such as Member Rankings, User Groups, Own Posts & Profile, Exclusive Research, Live Chat Box etc..

All information contained in this forum is subject to Disclaimer Notice published.


Thank You
FINANCIAL CHRONICLE™️
www.srilankachronicle.com


Join the forum, it's quick and easy

FINANCIAL CHRONICLE™
Dear Reader,

Registration with the Sri Lanka FINANCIAL CHRONICLE™️ would enable you to enjoy an array of other services such as Member Rankings, User Groups, Own Posts & Profile, Exclusive Research, Live Chat Box etc..

All information contained in this forum is subject to Disclaimer Notice published.


Thank You
FINANCIAL CHRONICLE™️
www.srilankachronicle.com
FINANCIAL CHRONICLE™
Would you like to react to this message? Create an account in a few clicks or log in to continue.
FINANCIAL CHRONICLE™

Encyclopedia of Latest news, reviews, discussions and analysis of stock market and investment opportunities in Sri Lanka

LISTED COMPANIES

Submit Post



Poll

Can there be another Covid-19 wave in Sri Lanka?

2014: We are bulls – smart money in equities Vote_lcap68%2014: We are bulls – smart money in equities Vote_rcap 68% [ 178 ]
2014: We are bulls – smart money in equities Vote_lcap18%2014: We are bulls – smart money in equities Vote_rcap 18% [ 47 ]
2014: We are bulls – smart money in equities Vote_lcap13%2014: We are bulls – smart money in equities Vote_rcap 13% [ 35 ]

Total Votes : 260

STOCK MARKET TRAINING
ශ්‍රී ලංකා මූල්‍ය වංශකථාව - සිංහල
Submit Post


CONATCT US


Send your suggestions and comments

* - required fields

Read FINANCIAL CHRONICLE™ Disclaimer



Latest topics

» Penny Stock Companies
by thankrishan Today at 1:28 pm

» Hidden Gem - GLAS - 40/- Soon
by invest thinker Today at 1:18 pm

» HSenid IPO
by abey Today at 12:31 pm

» Fundamental/Technical analysis & beyond ~CLC
by PhilT Today at 12:17 pm

» NAMU/WATA super gain
by Kaptivajkss Today at 11:37 am

» CEYLON GUARDIAN INVESTMENT TRUST PLC (GUAR)
by cheetah Today at 11:33 am

» Key Plantation Company Fair Values - KOTA, TPL and KVAL with very High Upside
by Kaptivajkss Today at 11:09 am

» LLUB comparison between 2016- 2021 Same EPS Trading at Huge discount
by Kaptivajkss Today at 11:04 am

» LOFC Direction
by PhilT Today at 10:58 am

» KZOO 32.8% Upside
by Swissinvest Today at 10:55 am

» LOLC waiting for LOFC 100+ and CLC 100+
by Swissinvest Today at 10:23 am

» LANKA REALTY INVESTMENTS PLC -ASCO
by D.G.Dayaratne Today at 7:10 am

» Bloodbath is Coming ? Correction is Coming ? අලුත් ගෲප් හදාගෙන අපි genuine කියලා එන පරණ මහත්(හොරුන්) වරුන් ගෙන් බේරෙන්න
by D.G.Dayaratne Today at 7:03 am

» BAIRAHA FARMS PLC (BFL.N0000)
by Pbv Yesterday at 9:33 pm

» TILE / LWL / RCL
by Thushara Ayya Yesterday at 5:16 pm

» Month end impact on LOFC and CLC
by Swissinvest Yesterday at 3:05 pm

» Water For All - CIND
by ErangaDS Yesterday at 2:20 pm

» U.S. inflation is one of the highest in the world
by ResearchMan Yesterday at 2:09 pm

» Oil Plummets
by ResearchMan Yesterday at 2:07 pm

» ASPI Trend
by hotstock Yesterday at 12:45 pm

EXPERT CHRONICLE™

MARKET CHAT


CHRONICLE™ ANALYTICS


ECONOMIC CHRONICLE

GROSS DOMESTIC PRODUCT (GDP)


CHRONICLE™ YouTube

LATEST TWEETS

You are not connected. Please login or register

FINANCIAL CHRONICLE™ » DAILY CHRONICLE™ » 2014: We are bulls – smart money in equities

2014: We are bulls – smart money in equities

3 posters

Go down  Message [Page 1 of 1]

sriranga

sriranga
Co-Admin

By First Capital Equities
Having underperformed against most developed and emerging markets during 2013 with a gain of just 2.3% (in dollar terms), we believe that the ASPI is set to change course during 2014 and poised for a much awaited re-rating.

Our bullish market outlook is due to the following;
Continued softening in domestic interest rates
2014: We are bulls – smart money in equities 12510

Twelve T-Bill rates have declined by 285 bps during 2013 and indications are that rates are likely to soften further this year which may result in a shift in funds from the money market to equities. In the Central Bank’s Monetary Policy Review for the month of January 2014, the Central Bank has already indicated that it will reduce the lending rate by 50 bps to 8.0% pointing to further reductions in market rates.

Recovery in corporate EPS growth. With domestic inflation expected to be benign during 2014, we expect operating margins of companies to improve from their 2013 levels. This combined with a reduction in interest costs should result in an expansion in corporate net margins thereby resulting in a recovery in corporate profitability.

Foreign fund flows will provide market momentum
2014: We are bulls – smart money in equities 31110

Notwithstanding eurozone debt tensions, most global equity markets rose during the year with foreign funds flowing into both developed and emerging market equities. As shown in the chart, the correlation between the MSCI Emerging Markets Index, the MSCI Asia Apex 50 index and the ASPI remains strong. With emerging market bond funds expected to record outflows this year, we expect liquidity to flow into emerging/frontier market equities. Given the country’s robust fundamentals, Sri Lanka may be a strong beneficiary.

Falling gold prices will provide boost to ASPI
2014: We are bulls – smart money in equities 21810

Having declined by 28% during 2013 and as one of the worst performing assets during the year, spot gold is expected to continue decline (albeit moderately) during 2014. Given the inverse co-relation between gold prices and the ASPI during the 2013 as evident in our chart, we believe that any further decline in gold should exert upward pressure on the ASPI.

Reduction in debenture offerings
The significant amount of debentures offered in 2013 mopped up approximately Rs. 72 billion of investible funds that could have otherwise entered the stock market resulting in market turnover levels falling to considerably low levels. Given our expectation of a further softening in interest rates in 2014, the allure of debentures as an ‘investible’ may wan resulting in a flow of funds back into equities.

In economic news, inflation on a YoY basis declined to a two year low of 4.7% in December 2014 compared to 9.2% recorded in the corresponding period of 2012. Consequently the annual average rate of inflation declined for the seventh consecutive month to 6.9% compared to 7.3% recorded in the previous month. A slowdown in the price increase of items in the Non-food category, from 10.0%YoY in 2012 to 6.1%YoY in 2013, contributed to a decline in the annual average inflation rate while relatively high inflation in the food and non-alcoholic beverages category has exerted upward pressure on the CPI.

2014 stock picking guidelines – Back to basics
In order to benefit fully from the bourse’s movements in 2014, we believe that investors may have to revisit the basics of equity investing to derive maximum returns at their accepted level of risk. While most domestic investors were discouraged to enter the bourse last year on the grounds that the market did not deliver, quality stocks listed on the bourse did however generate double digit returns and we believe that they are well likely to replicate their gains in 2014.

Key factors for investors to consider when investing in Sri Lankan equities in 2014 are;
* Defining the risk appetite
* Defining the expected rate of return
* Defining the investment horizon
* Decide on the sector
* Decide on stocks within sector

Market trajectory
While we do contend that the Sri Lanka bourse has not delivered on an YTD basis in 2013 due to a multitude of factors, our 2014 market outlook remains increasingly bullish. However, we advise investors to remain selective and focus on companies with largely monopolistic attributes and strong brand loyalty within sectors and sub-sectors that are both growth and resilient. We re-iterate the need consequently to build a solid portfolio of liquid stocks that have strong top line revenue growth and sustainable margins which we believe are likely to benefit most from the domestic demand story in sectors such as F&B, tourism, manufacturing, diversified, banking and construction. In this respect, we accentuate the need to take a directional call, make an informed investment decision, build a robust portfolio and maintain a strict investment discipline in order to benefit fully from the Bourse’s 2014 upward trajectory.
http://www.ft.lk/2014/01/06/2014-we-are-bulls-smart-money-in-equities/

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

mark

mark
Expert
Expert

So foreigners going to have a good return on what they have bought in last two years Smile

Leon


Assistant Vice President - Equity Analytics
Assistant Vice President - Equity Analytics

@mark wrote:So foreigners going to have a good return on what they have bought in last two years Smile

yes of course, Locals be ready to buy at higher levels from foreigners.

Sponsored content



Back to top  Message [Page 1 of 1]

Permissions in this forum:
You cannot reply to topics in this forum