DNH Financial yesterday described the selloff yesterday as disappointing and unjustifiable.
“The Bourse’s performance is clearly disappointing and the strength of the selloff in our opinion is unjustified,” it said.
“In terms of relative global performance, the Sri Lanka Bourse is now amongst the worst performers on an YTD basis. It is interesting to note, however, that despite the structural problems in the Eurozone, equity markets across the region have reported a firm rise since the beginning of the year while the Sri Lankan bourse has significantly underperformed even though Sri Lanka’s economic fundamentals have been comparatively far stronger than peers in the eurozone.
“We believe this dichotomy is attributed to lacklustre domestic investor sentiment notwithstanding the fact that the majority of listed companies have been reporting solid 3Q2012 corporate results,” DNH opined.
“While further price weakness cannot be ruled out, we advice investors to focus on fundamentally solid companies which can weather the current storm and outperform once the market reverses its downward course,” it said.
Arrenga Capital said valuations of the market are now at an attractive level with other frontier markets with the ability to compete for foreign investments. “Value seekers are advised to reduce cash allocation in their portfolios in order to pick stocks,” it added.
source - www.ft.lk
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