World Stock Markets Moving Up

World Stock Markets Moving Up,  Nikkei 941 points up  

Indian Stock Market 355 points up  

http://www.moneycontrol.com/markets/global-indices/

Now Nikkei 1110 points up

api mee wenasata garu karamu,Nikkie up 7% Topix 8% but CSE crashing.next week policy review.

Every where Green Stock markets

Gainer wrote:Every where Green Stock markets  

Except Sri Lanka.

It is true that Sri Lanka stock market has underperformed so far. But we need to analyse the underlying cause for that and also for the decline in world stock markets.

Investors have overreacted to the news that China is slowing down. The main cause for the world stock market crash. if you carefully analyse the situation Chinese stock market has achieved unprecedented growth rate during the last few years similar to the growth experience by CSE during 2009 and 2010. We all know that when such a growth happened the next is market correction for another few years and then the resumption of trend to test the all time highs again. Remember China's growth rate is only slowing down but not the economy is going down. I think most of the investors globally are slowly repositioning their stance hence we will see a gradual recovery all over the world. Further Brazil, Russia and India too witnessed a decline in growth rates together with US but the most of the panic created by China news.

On the other hand the continues decline in world oil prices have put the OPEC countries and other oil producing nations in big trouble so that their stock markets and stock prices have got affected which is unavoidable.

The other concern was the US rate hike. Yes they have increased the rates very marginally in last December but the Fed has voiced that further increase will not happen for the near term given the health of world financial markets.

So now Sri Lanka. Why the ASPI is in south ways. Is it sustainable? Should we all wait and see to reach that to 5800 or even lower than that to collect valuable counters? Is our currency going to depreciate towards 150-152 by the year end? Will our corporate results be impacted by the uncertain macro economic variables? Will the foreigners continue to sell down their holdings? These are the issue we all were discussing and that's why the ASPI is at 6270 from above 7000. So as at today what is our situation.
- Foreign reserves have stabilized somewhat
- IMF assistance is on the cards despite its conditions for fiscal discipline
- Foreign exchange rates are almost the same as the year beginning
- The continuous decline in oil prices will assist to cushion BoP deficit and will ensure the country have a stable energy related cost structure which is minimising the risks on manufacturing side because energy cost is one of the key input costs in their cost structure
- Foreign selling seems to be almost dried up and we can see some selective foreign buying as well
- Government has decided to accept China as the main investment partner and all are set to resume projects on hold as well as new projects (although this has to be done during Q2 of last year but it is better even start late than not start at all)
- Central bank is seen comfortable with current interest rate levels and the inflation still hitting lower single digit level ( we had couple of months of deflation as well in last quarter)
- Most of the corporate results released so far are exceptional and the QoQ consolidated growth in earnings is estimated to be 10% to 15% 

So the golden question to answer is will ASPI should come down to 6100 by end February and to 5800 by end of March and to be remain lacklustre till June and so on. This will be entirely depending on our perception. If we continue to worry on exchange rate, interest rate, world market sentiment, foreign activity, etc then sure you will have your red days not in small quantities but in mega style. If you think that market has reacted enough then you will come to see that there are lot of undervalued counters in the market and you will slowly establish positions. If that is the case you will see the ASPI of 6400 by February end, 6750 by March and gradually recovering to 7000 by Q2.

Remember the golden rule that stock market is based on crowed behaviour. If the majority decides it should be green then it definitely will and otherwise vies versa.  

My personal view is that Sri Lanka stock market has reacted too much for the negative news similar to China but China is coming from an era of 100%+ continuous growth but Sri Lanka index is yet to reach the all time highs establish in 2011 yet the consolidated corporate earnings have grown considerably from 2011 levels.

I wrote this to think by all of you not for a while but for sessions.

Thanks

Very good post EquityChamp I always read your post.

Yep. there is no foriegn buying atm.. its all foreign outflow from the market too. what usually happen is when the market is coming down Foreigners buy and backs the market. with global markets coming down they try to quite from emerging markets. so market reacting to lot of negativeness now doesn't react to positive things popping up....
We all havr to wait abit till the govt find a solution for the internal issues meanwhile foreign markets will recover slowly..

Last few days foreign markets recovered.. and today too...

 
 
 
Short Term versus Long Term Investing
 
 
 
 
 
 

World stocks markets moving up every day

http://www.moneycontrol.com/markets/global-indices/

Gainer wrote:World stocks markets moving up every day

http://www.moneycontrol.com/markets/global-indices/

Hope colombo will join soon.

 
 
 
It is better to stay with individual winning stocks and industries having positive outlook not only in the coming financial year but also in the coming years.