"Experienced traders control risk, inexperienced trader chase gains"- Alan Farley
Tuesday, 21 May 2013
Asian Wealth Research Daily Market Review 20th May 2013
The All Share Price Index gained 86.0 points to close at 6,466.7 (1.3%) while the S&P SL20 Index rose 60.1 points to close at 3,649.4 (1.7%).
Total turnover for the day stood at LKR1,282.7 mn (USD10,160.0 k) vs. 12-months average daily turnover of LKR921.0 mn (USD7,294.7 k), whilst the volume traded for the day was 44,033 k against the 12-month average daily volume of 40,852 k.
Top contributory counters towards the turnover for the day were, Commercial Bank LKR244.6 mn (USD1,937.6 k, 2.4%), John Keells Holdings LKR159.1 mn (USD1,260.2 k, 4.6%), Royal Ceramics Lanka LKR139.0 mn (USD1,101.2 k, -0.8%), Overseas Realty LKR37.8 mn (USD299.6 k, 5.0%) and Sampath Bank LKR28.6 mn (USD226.5 k, -0.9%).
The CSE continued its upward trend unabated with both the ASI and the S&PSL20 index closing up in the green. Commercial Bank was the top contributor towards the day’s turnover on the back of number of large transactions which took place on the counter.
A total of 4 crossings amounting to approx. 1.3 mn shares of Commercial Bank changed hands at a price of LKR122. In addition, two crossings were witnessed in Royal Ceramics Lanka, where 500 k shares changed hands at a price at LKR109.
John Keells Holdings continued to witness strong institutional and retail interest and benefitted from a price appreciation of 4.6% by the end of the day’s trading. The counter also reached an all time high of LKR298.50 over the course of the day.
Further, Overseas Realty, and Sampath Bank were amongst the top turnover contributing counters for the day, with Overseas Realty benefitting from a price appreciation of 5% to end the day at LKR18.80.
With respect to retail interest for the day, activity was witnessed in counters such as Overseas Realty, Seylan Developments and Colombo Fort Land & Building.
Foreign purchases amounted to LKR350.9 mn (USD2,779.4 k), whilst foreign sales amounted to LKR62.5 mn (USD495.3 k). This resulted in a net foreign inflow of LKR 288.4 mn being recorded at the end of the day’s trading.
Market capitalization stood at LKR 2,483.2 bn. YTD performance is 14.6%.
Sunday, 19 May 2013
Quote for the day
"My success, part of it certainly, is that I have focused in on a few things." - Bill Gates
The James Bond Method To Stock Trading
So
you want to be high flyer? Drive fast cars, attract the hot women, and
travel the world? What sounds like the James Bond way of living, isn’t
actually too far off that of a successfully wild stock trader?
While this approach might not be the most risk-adverse style of trading , we can all learn a thing or two from James Bond when it comes to making big bucks in the stock market.
Don't worry about the consequences
While he may get himself into some crazy situations, James Bond never lets fear get in the way of getting the job done. Bond will walk straight into dark hallways and rooms filled of bad guys, confident that he has the upper hand.
Just like Bond, you too can block out potential consequences of stock trading. Don't let the fear of losing money or a failed trade scare you away. Head into any situation, confident in your trading strategy.
Never get stressed out
For as great as Bond is, no other action hero gets caught into messy situations as much as Bond does. From the initial capture to just seconds before he finds his way out, Bond never loses his cool.
He stays calm under pressure and focuses on what to do next, rather than what might happen.
Just like Bond, you too can learn to keep cool under difficult situations. Understand that you don’t necessarily need to sell at the first sign of red or throw more money at the stock. Simply stay calm, asses the situation, and find your way out.
Don't stick around too long
Just as fast as the actual characters who play Bond shift, Bond himself never stays in one place too long. One second he could be in Russia and the next minute he is in Las Vegas. Even the time he spends with a woman is never too long to get him into any trouble.
Like Bond, you too should never stay around a stock too long. For quick action, jump from stocks to stocks finding the ones with the most momentum and skipping out on the stale ones.
Indulge
While Bond may be running to stop a nuclear bomb from going off, there is always enough time for a drink or a romantic night with a lady friend.
While stock trading is a serious matter, it doesn't have to all be about facts and figures. Make sure to set time aside and enjoy the fruits of your labor. It keeps the game interesting.
Find the latest and greatest
Bond movies are loved in large part due to the amazing gadgets and gizmos Bond uses. Whether it is a car that can become invisible or a car that can be driven by a phone, Bond always has advanced tools to help him get the job done.
In stock trading, the big bucks are made in speculation. By betting on certain companies, products, or sectors, you give yourself an opportunity to be ahead of the curve and profit once the benefit is realized.
Have a constant
“A martini. Shaken, not stirred”
One of the most popular lines in all of cinema, throughout all the changes the drink of choice for Bond has not altered.
Just like Bond, you too should have a constant. Something you can fall back on. It could be a go-to stock, sector, or type of trading strategy.
The key is to have something to fall back on when times get rough.
Leverage everything
Every action Bond takes requires him to leverage everything. Whether it is to jump out of building with no parachute or jump in tank full of sharks, Bond puts everything on the line for the big prize, the homerun, if you will.
To make money the Bond way, it requires putting up big money and even leveraging more. Bet that everything will come out okay and the final result will be in your favour.
The “Bond Trading Strategy” definitely is not meant for the weak of hearts, but, if executed nicely, could result in some hefty pay days and some more double 0’s in your bank account.http://thewildinvestor.com
Friday, 17 May 2013
Gains in large cap counters take market to the green
The week concluded on a positive note with the All Share Price Index gaining WoW owing to gains witnessed across the board. The ASI gained 130.7 points WoW to close at 6,380.7 points (2.1%), whilst the S&P SL 20 Index gained 58.4 points WoW to close at 3,589.3 points (1.7%). Indices gained mainly on the back of the gains made by John Keells holdings (6% WoW), Nestle Lanka (8.1% WoW), Ceylon Tobacco (5.1% WoW), Sri Lanka Telecom (4.4% WoW) and Cargills Ceylon (5.2% WoW).
Sri Lankan stocks which witnessed a bearish momentum during the beginning of the week saw a revival towards mid week with institutional activity helping the indices to edge up to end the week on a positive note. Heavy retail and institutional activity was witnessed as at the end of the week with strategic transactions dominating turnover levels. Furthermore, the week witnessed the release of 1Q2013 earnings of most of the Banks. Majority of the banks witnessed a decline in their profitability largely owing to the slowdown in loan growth amidst the high market rates and the FOREX losses incurred due to the appreciation of the LKR during the quarter.
However, despite the unsatisfactory results of the sector, heavy investor play was witnessed in the banking sector during the week presumably because investors expecting an improvement in sector performance going forward with the market interest rates falling down. Re affirming this Banking, Finance and Insurance sector index witnessed a WoW gain of 0.5% while the sector contributed a circa of 33% to the weekly turnover.
Aitken Spence backed heavy institutional investor play during the week, which assisted the counter to top the list in terms of turnover adding circa 16.5%. John Keells Holdings also emerged among the top turnover list backed primarily by large scale foreign transactions. Counter witnessed a 6.0% WoW gain in its market cap while reaching an all time high of LKR285.00 as at Friday. Due to the high investor play witnessed in the above two counters the diversified index witnessed the highest WoW gain of 3.2% while the sector contributed 35% to the weekly turnover. During the week crossings were also recorded in counters such as Piramal Glass Ceylon, Dialog Axiata, National Development Bank, Commercial Bank and Sampath Bank. On the back of these developments, the week saw an average turnover of LKR1.2bn and an average volume of 42.9mn.
Furthermore, Piramal Glass Ceylon, Dialog Axiata, PC House , Free Lanka Capital Holdings and Aitken Spence topped the list in terms of volume traded during the week.
The week saw foreign purchases amounting to LKR3,159.8 mn whilst foreign sales amounted to LKR 1,572.1 mn. Market capitalisation stood at LKR 2,450.2 bn, and the YTD performance is 13.1%.
Conclusion:
Borrowing costs trend downwards whilst foreign interest retained...
After a hesitant start on account of profit taking, the market continued its upward trend adding 2.1% WoW to its index value. This could be a delayed reaction to the Central bank’s decision to ease policy rates and its monetary policy stance. In response to the policy rate revision, Treasury bill rates in the primary and secondary offers dipped whilst the Central bank kept a tight hold on liquidity to prevent excess borrowings which could spur demand-pull inflation, as inflation currently remains at an elevated level.
Contemporaneously the LKR strengthened against the USD over the week and according to currency dealers, this could be as a result of commercial banks translating dollar holdings to LKR in order to increase the supply of domestic loanable funds. This development along with a drop in Banks’ average weighted prime Lending rate (AWPLR) subsequent to the policy rate revision suggests that demand for loans could be on the rise. This would have implications for the future earnings of banking sector counters, which could witness growth in their loan books (which witnessed a slowdown in 1Q2013) and result in higher earnings.
This would explain the continued interest witnessed in banking sector counters which witnessed a slowdown in 1Q2013 earnings primarily due to currency conversion effects and a slowdown in loan growth. This could in turn have a positive trickle-down effect on the rest of the sectors of the economy as the lower interest rate environment could galvanize firms to invest in expansionary activities which could result in value creation for equity holders. This could partly explain the continued foreign interest in the domestic equity market which recorded a high net foreign inflow of LKR1.6 bn for the week.
Source: Asia Wealth Management Research
Sri Lankan stocks which witnessed a bearish momentum during the beginning of the week saw a revival towards mid week with institutional activity helping the indices to edge up to end the week on a positive note. Heavy retail and institutional activity was witnessed as at the end of the week with strategic transactions dominating turnover levels. Furthermore, the week witnessed the release of 1Q2013 earnings of most of the Banks. Majority of the banks witnessed a decline in their profitability largely owing to the slowdown in loan growth amidst the high market rates and the FOREX losses incurred due to the appreciation of the LKR during the quarter.
However, despite the unsatisfactory results of the sector, heavy investor play was witnessed in the banking sector during the week presumably because investors expecting an improvement in sector performance going forward with the market interest rates falling down. Re affirming this Banking, Finance and Insurance sector index witnessed a WoW gain of 0.5% while the sector contributed a circa of 33% to the weekly turnover.
Aitken Spence backed heavy institutional investor play during the week, which assisted the counter to top the list in terms of turnover adding circa 16.5%. John Keells Holdings also emerged among the top turnover list backed primarily by large scale foreign transactions. Counter witnessed a 6.0% WoW gain in its market cap while reaching an all time high of LKR285.00 as at Friday. Due to the high investor play witnessed in the above two counters the diversified index witnessed the highest WoW gain of 3.2% while the sector contributed 35% to the weekly turnover. During the week crossings were also recorded in counters such as Piramal Glass Ceylon, Dialog Axiata, National Development Bank, Commercial Bank and Sampath Bank. On the back of these developments, the week saw an average turnover of LKR1.2bn and an average volume of 42.9mn.
Furthermore, Piramal Glass Ceylon, Dialog Axiata, PC House , Free Lanka Capital Holdings and Aitken Spence topped the list in terms of volume traded during the week.
The week saw foreign purchases amounting to LKR3,159.8 mn whilst foreign sales amounted to LKR 1,572.1 mn. Market capitalisation stood at LKR 2,450.2 bn, and the YTD performance is 13.1%.
Conclusion:
Borrowing costs trend downwards whilst foreign interest retained...
After a hesitant start on account of profit taking, the market continued its upward trend adding 2.1% WoW to its index value. This could be a delayed reaction to the Central bank’s decision to ease policy rates and its monetary policy stance. In response to the policy rate revision, Treasury bill rates in the primary and secondary offers dipped whilst the Central bank kept a tight hold on liquidity to prevent excess borrowings which could spur demand-pull inflation, as inflation currently remains at an elevated level.
Contemporaneously the LKR strengthened against the USD over the week and according to currency dealers, this could be as a result of commercial banks translating dollar holdings to LKR in order to increase the supply of domestic loanable funds. This development along with a drop in Banks’ average weighted prime Lending rate (AWPLR) subsequent to the policy rate revision suggests that demand for loans could be on the rise. This would have implications for the future earnings of banking sector counters, which could witness growth in their loan books (which witnessed a slowdown in 1Q2013) and result in higher earnings.
This would explain the continued interest witnessed in banking sector counters which witnessed a slowdown in 1Q2013 earnings primarily due to currency conversion effects and a slowdown in loan growth. This could in turn have a positive trickle-down effect on the rest of the sectors of the economy as the lower interest rate environment could galvanize firms to invest in expansionary activities which could result in value creation for equity holders. This could partly explain the continued foreign interest in the domestic equity market which recorded a high net foreign inflow of LKR1.6 bn for the week.
Source: Asia Wealth Management Research
Quote for the day
"A man should never be ashamed to own that he is wrong, which is but saying in other words that he is wiser today than he was yesterday." - Alexander Pope (1688-1744)
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