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Stock Market Collapse: Madness or Adjustment?

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God Father

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Senior Manager - Equity Analytics
Senior Manager - Equity Analytics

Stock Market Collapse: Madness or Adjustment? Img_2710

Current market downfall is not madness but the adjustment that was long overdue. Market was pumped up after debt restructuring by opportunists without any clear economic recovery. Sri Lanka is yet to pay a single dollar to its lenders and bondholders. Top corporate performance are falling as reported in 1Q2024/25 due to lower demand for their goods and services. 2Q performances are also expected fall further due to economic mismanagement and political interplay. Many concessions (salary increases to government servants and loan write off to farmers etc) promised by the incumbent President and other leading candidates are likely to result in increased public expenditure which will require further increase in VAT and other taxes. Further there will be Capital Gain Taxes and Property taxes in 2025. The real effect will be felt in January 2025. Brazil, Argentina, Bangladesh and Maldives are best examples of what is in store for the future of Sri Lanka. Stock market is not a place to gamble your hard earned money.

Above prediction was done in December 2023
https://www.srilankachronicle.com/p1048828-colombo-stock-market-2024-prediction

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Post Wed Sep 04, 2024 1:10 pm by Rare

History is repeating. When everyone is bearish that's the time to buy.

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Post Thu Sep 05, 2024 11:47 am by Rare

Some reasons for weak market scenario are new IPOs, large bond issues and right issues.

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