ipos have spoiled the market all the money has gone to the companies

dr kiru005

dr kiru005

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the ipos are the reason for the current trend of market, i believe this has been caused by draining of the share holders money from the market to the new ipos and eventually the share holders' are drained out of funds to trade.. i think the market will reverse if the ipos stop coming or the share holders stop buying ipos.

Surangaby

Surangaby

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dr kiru005 wrote:the ipos are the reason for the current trend of market, i believe this has been caused by draining of the share holders money from the market to the new ipos and eventually the share holders' are drained out of funds to trade.. i think the market will reverse if the ipos stop coming or the share holders stop buying ipos.

Yes! But I think that's only a 1 reason, economic + political situation (international pressure) plays a big part, don't u think? Me too in 2 minds to invest more in this passage of time.

UKboy

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Surangaby wrote:

dr kiru005 wrote:the ipos are the reason for the current trend of market, i believe this has been caused by draining of the share holders money from the market to the new ipos and eventually the share holders' are drained out of funds to trade.. i think the market will reverse if the ipos stop coming or the share holders stop buying ipos.

Yes! But I think that's only a 1 reason, economic + political situation (international pressure) plays a big part, don't u think? Me too in 2 minds to invest more in this passage of time.

What you both said has an impact on the market to a certain degree.
But the main reason is our undisciplined immature small investors.

They all now hold their guns against regulators. Pointless

sanjeewa88

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I think there are 3 reasons to market depression these days

1. Credit crunch- CSE rules are forced to clear the credit balances.
2. No expectations in economic and political side.
3. Too much IPOs.

However first 2 are most probably to be affected.

Aamiable

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Now, share price tend to come down below the IPO price whats the point in applying for IPO.

Surprised

sanjeewa88

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Share prices coming down below the IPO price is due to some reasons other than I said above.

First see the potential of price performance of the company. EPS, PE, NAVPS are the basics.

Price per share at IPO plays a major role.

Quantity is also important. Because at the very first day, if supply of the shares goes up then price level will come down. ( A simple economic theory)

ABEST

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brother, please see
mark post
http://forum.srilankaequity.com/t5687-how-we-can-manage-our-existing-shares-from-upcoming-ipo-tsunami

they must keep time distance

sanjeewa88

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ABEST wrote:brother, please see
mark post
http://forum.srilankaequity.com/t5687-how-we-can-manage-our-existing-shares-from-upcoming-ipo-tsunami

they must keep time distance

That's very true. Excess liquidity has absorbed by past IPOs.

Time gap is essential to pacify this problem.

Do you believe it is the only reason to create this kind of problem?

Soundchips

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at the end , all ipo came to the market have declined due to overall decline

Hiru

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In my view following things have been contributing more or less for this situation.

1. Irrational Investor Decisions-people went after shares without considering the true value of shares, at rally's. When the market activity level started stagnation, all investors had some time to analyse the true value of their existing holdings and as a result they identified true values and started acting accordingly. As the almost all shares were overvalued, investors tried to sell their shares-so selling pressure.

2.Broker Credit-No matter what ever happens, broker gets brokerage only when there are transactions. Because of this reason brokers gave credit to investors, sometimes without any limit. They did this without hesitation until SEC imposed some rules. Had they been earning their brokerage on ethical practices, they could have educated the investors that there are economy wide bad impacts if CSE running on credit.

3.Personal loan - I believe that there are so many investors, including my self, have taken personal loan to invest in share market at least before 2010 September. But most of them had to suffer losses due to various reasons and they could not earn profit sufficient to meet even interest cost. Therefore, they have created selling pressure by disposing shares at least possible loss.( I have earned more than 200% profit and I have guaranteed income to pay personal loan installment).

4. IPO - this is simply a way of draining money from investors to the IPO companies.

5. Political issues internal and external

6. Decreasing value addition by companies. This is a huge problem as it affects the share values. Gambling can succeed without value addition but share market investments need increasing value addition to push share prices up.

7. Inconstant and undue regulations by SEC and CSE.

8. Interest on broker credit.

duke

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If people are selling existing shares to buy new coming stocks, that is because existing ones are valued more than they are worth. That's why existing ones get sold to buy some attractive new shares.

why would you pay 30, 40, 50 price multiple for stocks?

wiki

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Now the CSE is at expansion phase that is why lot of companies are listing. This is good in long term.

problem at the moment is lack of funds..

foreigners are net sellers due to high PE of market and poorly managed international issues, internationally Sri Lanka's image is tarnishing.
funds available with brokering firms are stuck because of change of margin rule

hope these thing will settle towards the end of year.
just hang on future will be good .............provided Sri Lankan use their brain more instead their heart

Soundchips

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duke wrote:If people are selling existing shares to buy new coming stocks, that is because existing ones are valued more than they are worth. That's why existing ones get sold to buy some attractive new shares.

why would you pay 30, 40, 50 price multiple for stocks?

these days IPO ,.. new coming stocks.. become less and less attractive. after they come to the market decline.

UKboy

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duke wrote:If people are selling existing shares to buy new coming stocks, that is because existing ones are valued more than they are worth. That's why existing ones get sold to buy some attractive new shares.

why would you pay 30, 40, 50 price multiple for stocks?

hahah duke, Dont forget our small investor's mentality. According to them this happens due to future projects...!!!!

They also think 99% counters are illiquid so we have to buy the shares well in advance to avoid the last minute rush and then wait wait and wait....

mark

mark

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dr kiru005 wrote:the ipos are the reason for the current trend of market, i believe this has been caused by draining of the share holders money from the market to the new ipos and eventually the share holders' are drained out of funds to trade.. i think the market will reverse if the ipos stop coming or the share holders stop buying ipos.

nop,nop,nop........IPOs are not the case,if you think IPOs are the problem,then the percentage may be around less than 5% of total downfall,as i think.........remember many IPOs are filled with bank guarantees..this is a long waiting correction from early of this year

"There are 3.5 million investors in the Dhaka Stock Exchange (DSE), many of whom have sold their possessions and borrowed as much money as they could to invest in stocks during last year's bubble growth. The stock index took a dip in December, but recovered, and people started pouring money in again. The DSE index fell about 15% in two days, early last week, causing riots and violence among investors.".......
(from Bangladesh crash)

remember still there is good counters,btw dont try to buy thinking that those shares would gain its all time high when market recover,those share may sunk forever or stagnant for times,just my idea

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ipos have spoiled the market all the money has gone to the companies

1 ipos have spoiled the market all the money has gone to the companies Wed Jun 29, 2011 12:19 am

dr kiru005

2 Re: ipos have spoiled the market all the money has gone to the companies Wed Jun 29, 2011 12:58 am

Surangaby

3 Re: ipos have spoiled the market all the money has gone to the companies Wed Jun 29, 2011 1:56 am

UKboy

4 Re: ipos have spoiled the market all the money has gone to the companies Wed Jun 29, 2011 6:09 am

sanjeewa88

5 Re: ipos have spoiled the market all the money has gone to the companies Wed Jun 29, 2011 6:17 am

Aamiable

6 Re: ipos have spoiled the market all the money has gone to the companies Wed Jun 29, 2011 6:40 am

sanjeewa88

7 Re: ipos have spoiled the market all the money has gone to the companies Wed Jun 29, 2011 6:53 am

ABEST

8 Re: ipos have spoiled the market all the money has gone to the companies Wed Jun 29, 2011 7:30 am

sanjeewa88

9 Re: ipos have spoiled the market all the money has gone to the companies Wed Jun 29, 2011 8:08 am

Soundchips

10 Re: ipos have spoiled the market all the money has gone to the companies Wed Jun 29, 2011 8:26 am

Hiru

11 Re: ipos have spoiled the market all the money has gone to the companies Wed Jun 29, 2011 8:38 am

duke

12 Re: ipos have spoiled the market all the money has gone to the companies Wed Jun 29, 2011 8:40 am

wiki

13 Re: ipos have spoiled the market all the money has gone to the companies Wed Jun 29, 2011 8:47 am

Soundchips

14 Re: ipos have spoiled the market all the money has gone to the companies Wed Jun 29, 2011 11:47 am

UKboy

15 Re: ipos have spoiled the market all the money has gone to the companies Wed Jun 29, 2011 11:07 pm

mark

16 Re: ipos have spoiled the market all the money has gone to the companies

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