Financial Experts

[GTAm]

but most sharesh ave taken a tumble - even JKH - that issue with the bunkering facility ended up with thier stocks taking a massive hit , so much so that they were paying a higher than mkt rate top buy back thier own shares that were being dumped - also helped on another fornt that move but still..

This was such an unfortunate event for the market as well as the economy as a whole. This is the common way that deals our done in developing countries. Even now we hear some scary stories about how the Central Bank is determining suitors for Seylan.

It was just a personal vendetta fronted by that totally useless moron V N. Why on earth did he have to dig into old stuff like this which sent shock waves towards investors when that glaring COPE report was begging for attention!? Has there been a more unproductive politician in SL? And how many votes did he win anyway? In his whole career??

Hats off to JKH for coming out of the situ. They've made a series of smart moves and remains the most favourite stock on the market. In fact I'm certain that this year's figures will be a good improvement despite the loss of earnings from the bunkering. Now that's resilience! Agree Devinda? I know you work for an equally impressive Blue cHip now

[MeanGreenZ28]

Mean,

If you can find that info, please post it.

Here you go ... http://www.cbsl.gov.lk/pics_n_docs/07_af_2...ra/diaspora.htm ... that's all I can get for now, I'll update if I find anything else. Hope it helps.

[Mani]

Thanks Mean and everyone else. I'm reading all of this with great interest. Lot of good information and my compliments to the topic start.... ehhh... wait, never mind

[MeanGreenZ28]

Thanks Mean and everyone else. I'm reading all of this with great interest. Lot of good information and my compliments to the topic start.... ehhh... wait, never mind

here's a drawing to make a self-back-patter ... lol

[xXx]

jadey .... U seems to know what you are talking about my man .... yap for around 30 to 50 mil you can build your own hydro power plant(there are smaller projects where you can do it for around 5mil but there's no benefit of doing so ) in some rural areas which makes a moderate amount of electricity according to the money you spend and connect it to the national grid to distribute .... Or I guess you can even sell it to the doods in the area through the electricity board but according to the srilankan law you cannot do any thing by your self in the electricity sector cos it's not privatized..heard some dood is the sole investor for the power plant in jaffna which is been build even when we speak right now and is gona run on diesel I suppose

machang are you sure about this? AFAIK you enter into an agreement with CEB to provide a unit of electricity at an agreed price for a certain period of time. its like leasing a land on long term basis. you do not need to enter into a partnership with the CEB to build the power plant. on top of the capital, you need a lot of political fire power to get into a venture of that sort and mainly to strike a lucrative agreement with CEB. all the commotion over kerawalapitiya power plant is a good example. i do agree there is money to be made. Mr. casino sold one of his energy companys couple of months back for a very handsome amount.

[xXx]

It was just a personal vendetta fronted by that totally useless moron V N. Why on earth did he have to dig into old stuff like this which sent shock waves towards investors when that glaring COPE report was begging for attention!? Has there been a more unproductive politician in SL? And how many votes did he win anyway? In his whole career??

this is what i don't get. he is one of the presidential advisers. and they enter into the agreement during MR's time. so who actually got the grudge??? vasu or MR & Co?????????????????

[xXx]

IMO investing on stocks is pointless in sl.

care to explain my good man

[xXx]

Dont ever chase high interest rates if you wish to lose you capital in the end. I have my own evaluation regarding the Golden Key crisis that has been coming up quite often in the forum and any conversation iv had with a fellow sri lankan. Please correct me if im wrong.

Here's my example hope you wont find it too silly sort of.

Eg: Lets say you invested Rs.1,000,000/= in GK funds. Their annual interest rate was 30%. Not taking inflation into account you are going to recover your entire investment in a period of 3.3 years. Assume you were a customer for 5 years taking the long period GK was in operation in SL markets. You are going to earn 1.5 million on "interest alone" on an investment that was only 1 million initially in a period of 5 yrs. If you were able to withdraw your capital right on time cosider you hit the jackpot. Humans in nature love high returns and our fellow sri lankan were nothing less. Everyone lived life lavishly thinkin their capital is safe in the Golden hands of GK only to find out they are about to find out their investments are floating in thin air. GK offered trips abroad, hotel packages and what not to keep their customers happy. Only for a temporary period. My arguement is most people who invested in GK have recovered their investment or more than what they invested through intrest by itself alone. I doubt people going to get their capital back. Now if you invested that money in a T-Bill, yes your going to have much less interest income but consider the fact your going to get your capital back. Which means 1,000,000 + (1,000,000*20%*5yrs) = 2,000,000. So the man who invested in T-Bills was the winner end of the day, holding on to his initial investment and the interest too.

Devaka, i think TB aren't 100% tax free (i need to double check on this). advantage of GK and similar financial institutions were by investing in them you had the ability to go under the radar of the inland revenue department. that's why lot of high net worth individuals pour their money onto GK by the bucket loads. plus not too many people got 30% they were initially paying very realistic interest rates of low to mid 20's. what went wrong with GK was massive internal financial malpractice, domino effect and fear psychosis triggered by sakvithi scam and the crash in the real estate market.

[xXx]

the best thing is to buy at a IPO ...

machang can you enlighten me on the theory behind this? i believe people who undertook that strategy during the dot com bubble will say otherwise.

there was another system online currency exchange thing going on for all the doods who are really stucked infront of a PC and the returns were good but as the stock market you always have to keep in touch with the updates or else you will endup loosing your money ...

are you talking about trading currencies online or spread betting???? in both instances there's a whole bunch of other commodities you can trade not just forex

[xXx]

My personal advice is to spread your risk. Lock part in rupees on High interest and part can be left in Foreign currency. If your talking large amounts you could even hedge (I know this is a dirty word to many) against future movements and make a load of money.

U might also want to put a small % of your funds in shares. The market has never been this under-valued........ And if the war is really over...........

GTAm what future movements are you talking about? and what exactly are you proposing to hedge?

you are spot on about the equity market but the million dollar question i guess is when will it pick up and return to its normal level ( i know 'normal level' is a very subjective world but you get what i'm trying to say right)? we had an exiting last week but that all important foreign buying figure is still lower than the selling. for how long can the local investors alone drive the market up?

[Kavvz]

Your probably right, we cannot compare a developed mkt like the US with a tiny growth mkt like Colombo. But my view is that being a tiny growth mkt there's a lot more potential than a mature mkt...... Just my opinion. And let's face it the US is still in Sh*t street isn't it?

Anyway your right again about finding info in the US being easier than SL. But remember SL is still a grossly under-developed economy. The markets are still very very small even by Asian standards.

Btw I was alarmed at the dressing up about the Merril Lynch quarterly report. I had no idea that something like that could get through the SEC or accounting body. I can't recall the exact details but saw a report on it on the BBC.

I recall our early 90's boom very well...... And I feel we are preparing for another one again. All the signs are there.

I am in no doubt that there are loads of US companies with great ratios. But there are quite a few Sri Lankan companies sitting on cash, waiting. These should have reflected well in their Current and quick assets ratios. Also don't forget that our market P/E is 6.5!!!! It was in the high 20s during the early 90s during the Premedasa regime. So we know the potential an end of a military conflict can have on investor confidence.

Admittedly the Beta has been quite low for most stocks. There simply has not been any positive news at all until now.

Inflation can also be viewed as positive in the market, where replacement costs increase and so in turn do assets on the Balance Sheet. Devinda Z might not like this view I'm sure !?

In a growth market more emphasis is placed on the future and we have to consider that the macro environment will be changed with the drop in military operations. The country has to be viewed in a new perspective.

One thing for certain is that corruption will not cease. If at all it will increase. This is the biggest problem I have with SL. Especially as we know in the govt. sector. This could cheese off investors.

On the other hand. There's so much of reconstruction and development waiting to happen. Retail sales will increase because of relative normalcy returning. Export earnings are going to shoot up because of the devaluation, and general business confidence is on the way up. This last factor is what is MOST important for the market IMHO.

I agree totally our SEC and CSE are out-dated monuments and desperately need to be spruced up. The markets need to be developed a lot. But there's a LOT of potential I think on the SL Mkt.

I agree GTAm, despite all the fancy reports and regulations the US is indeed up shit creek. And all shit at the end of the day smells equally bad even though it might look a bit different.

I guess my hesitation at investing in Sri Lanka stems primarily from my inability to find reliable information and at 'being out of the loop' so to speak. But that's just circumstance and it doesn't mean that its a bad market or that there aren't good companies listed on the CSE; as you point out there is a lot of potential in South Asia which will only increase as the region becomes more developed.

Edited April 28, 2009 by Kavvz

[kotte mafia]

YAp XXX you need a lot of fire power to pull of such a deal ....and you are spot on the subject what I told was that you have to make a deal with the CEB to buy a unit at a fix price for a reasonable amount of time ....

What I wanted to explain was that you cannot transmit by your self locally cos the law prohibits this...

I never knew Mr casino owned any power plants ... i kiwi some one who kws him very well even his elder brother before he was gunned down by that stupid cops ... the bugger has a lots of money and heard recently that he lost a lot as well

recently my uncle acquired a lot of shares in a local Gas and Oil company but to get such a load of shares you have to divide it through alot of ppl you kw and you have to deposit the money in the bank for the amount of shares you bid when all this is over at a given day they look at the amount of shares ppl want and if its over the limit they divide in in percentages and give every one some thing.... so for an example if you pay 1000 $ for 1000 shares same times you will end up with 500 shares after that according to the market prices you sell or buy accordingly ... i bought few thousand shares at a telecom giants IPO release and sold it after 1 week and got a solid profit for the money i invested .... My friend told once share prices were 10times more that when he bought in the morning.. But over here there's a limit of increase and as well as decrease.... so the market never fly's over the roof or never falls to the ground.... that's what i kw about the stock market and most of the time if i need to trade i go with some elder who kws better than me...

ya XXX i was talking about forex machang i forgot the name and there are alot of other currency trading software's in the market too ....

KAWZ i don't think personally buying cars would be a good way to invest in this hard times .... machang .... and how best of luck on your RX8 Dream hope you will get your RX8 before I buy my G.cherokee SRT8 ....

and thankz alot mean green on the update ......

[Kavvz]

KAWZ i don't think personally buying cars would be a good way to invest in this hard times .... machang .... and how best of luck on your RX8 Dream hope you will get your RX8 before I buy my G.cherokee SRT8 ....

You crack me up man But thanks for the wishes, and all the best on the Cherokee SRT purchase...hopefully we'll both be able to pick up our respective rides at a discounted rate once the market bottoms out a bit more!

[JadeyBlitzen]

care to explain my good man

well its just my opinion. i havent seen a major stock market success story in sl for one. and i was never good with stocks anyway

just feel a lot safer throwing all my money into an fd.

[MeanGreenZ28]

Thanks Mean and everyone else. I'm reading all of this with great interest. Lot of good information and my compliments to the topic start.... ehhh... wait, never mind

Hey got a bit more. That link should give you most of the info you need, but if you want to talk to someone, you can contact Mr. Nimal Karunatillake, who is a Minister (Commercial) in the Embassy at [email protected] ... hope this helps too.

[kotte mafia]

jadey may be u don't kw machang ...... but there are some guys who earned alot through stocks ... a good example is the dood who bought the Australian embassy building next to the museum at Colombo ..... the bugger got rich through investing in the stock market

KAWZ .. thankz alot man and wish you the same ....

[DevakaC]

Devaka, i think TB aren't 100% tax free (i need to double check on this). advantage of GK and similar financial institutions were by investing in them you had the ability to go under the radar of the inland revenue department. that's why lot of high net worth individuals pour their money onto GK by the bucket loads. plus not too many people got 30% they were initially paying very realistic interest rates of low to mid 20's. what went wrong with GK was massive internal financial malpractice, domino effect and fear psychosis triggered by sakvithi scam and the crash in the real estate market.

XXX quite true on the fact GK investments and their returns went under the radar of the Inland revenue. Well we'r talking about an Inland revenue where tax files dissappear for a few green notes. I heard the list of the investors on GK went up public on the local newspapers and shouldn't atleast this give the Inland revenue the balls to audit these people and make them justify where all these Millions and billions come from? there was a high suprise number of investors who had well over 5 million on the deck... I know people who had well above 10 million on this.

I believe GK wouldnt have come down if sakvithi didnt come down. It was more like the housing crisis here in the US. These are like virus outbreaks that spread so fast you barely have control. Its possible even Commercial bank or any other financial institution for that matter to fall down if all their investments are withdrawn in a short period of time. I dont blame the economy at all for the downfall of GK. Actually the economy of SL went down becuase of GK.

I also learned the wife of one of our recently assasinated minister's was the first to withdraw money fearing GK being another Sakvithi and a few followed her. And soon everybody tried withdrawing money which ended up putting the directors in line of fire. Anybody who understand how an Insurance company or any other intrest paying company works would understand what GK was doing with their funds. The central bank has its hand on this too.. GK is history now its just another Enron story.. interesting analysis from your end too..

[GTAm]

this is what i don't get. he is one of the presidential advisers. and they enter into the agreement during MR's time. so who actually got the grudge??? vasu or MR & Co?????????????????

I mean the "deals" went through during CBKs time and the speculation is that CBK earned something. It's MR vs CBK. Personal vendetta for slandering him....... Vasu was just the guy being totally jobless and useless to everyone.

[GTAm]

GTAm what future movements are you talking about? and what exactly are you proposing to hedge?

you are spot on about the equity market but the million dollar question i guess is when will it pick up and return to its normal level ( i know 'normal level' is a very subjective world but you get what i'm trying to say right)? we had an exiting last week but that all important foreign buying figure is still lower than the selling. for how long can the local investors alone drive the market up?

Future currency movements. I'm no currency expert but I'm sure there are instruments to hedge against future rates of forex whether it's up or down. And so it is with TBs and bonds.

If I knew when exactly the market would pick up, then I'd sell all my Alfas on a buy back agreement at double the selling price!!! No one knows where the bottom is, but we can make intelligent guesses. And my guess is its close. Waiting for a clear sign will be too late.

Foreign investors are quitting our market as their funds all over the world are totally screwed. They have little choice. It's our local guys who'll drive up the market. And of course there will be a new set of foreign investors. Indians for sure. Watch this space.

Maybe the boom, will not be spectacular since this is the most investor-UNfriendly government we have had for decades. But after the war is ended they'll have to find new ways of keeping their stellar personal earnings ticking. Also Politics are so unpredictable that there could be changes that we could never predict. Just look at how MR became prez......Could anyone have seen that coming?

Anyways our private sector is super resilient. We just need a boost from the International community. I know the govt. is making that all but impossible, but eventually they'll have to cow down and beg. Just like they're doing with the IMF now.

So BUY!

I'll fax you my invoice for this advice

[xXx]

jadey may be u don't kw machang ...... but there are some guys who earned alot through stocks ... a good example is the dood who bought the Australian embassy building next to the museum at Colombo ..... the bugger got rich through investing in the stock market

KAWZ .. thankz alot man and wish you the same ....

you are spot on. there may not have been a success story from share price wise but there is an impressive list of local investors that managed to beat the market on numerous times. another recent success story i mean individual from top of my head is a son of a very famous mass car dealer

[xXx]

I mean the "deals" went through during CBKs time and the speculation is that CBK earned something. It's MR vs CBK. Personal vendetta for slandering him....... Vasu was just the guy being totally jobless and useless to everyone.

oh yes my bad i was under the impression the deal was sealed during MR's time hence the treasury secretary got the boot. oh yes CBK and JKH had a special bond thanks to non other than Mr. Peries. man that women is undoubtedly the worst leader we ever had

[xXx]

Future currency movements. I'm no currency expert but I'm sure there are instruments to hedge against future rates of forex whether it's up or down. And so it is with TBs and bonds.

If I knew when exactly the market would pick up, then I'd sell all my Alfas on a buy back agreement at double the selling price!!! No one knows where the bottom is, but we can make intelligent guesses. And my guess is its close. Waiting for a clear sign will be too late.

Foreign investors are quitting our market as their funds all over the world are totally screwed. They have little choice. It's our local guys who'll drive up the market. And of course there will be a new set of foreign investors. Indians for sure. Watch this space.

Maybe the boom, will not be spectacular since this is the most investor-UNfriendly government we have had for decades. But after the war is ended they'll have to find new ways of keeping their stellar personal earnings ticking. Also Politics are so unpredictable that there could be changes that we could never predict. Just look at how MR became prez......Could anyone have seen that coming?

Anyways our private sector is super resilient. We just need a boost from the International community. I know the govt. is making that all but impossible, but eventually they'll have to cow down and beg. Just like they're doing with the IMF now.

So BUY!

I'll fax you my invoice for this advice

yup buying is the way forward. yet another interesting day today. but my worry is more than half the turnover has come from just two equities. and i can't help but to raise an eyebrow on the fluctuation of JKH share price mainly coz some of the major stake holders of that company is very renowned for playing the market. i was just wondering the other day weather this recent bullish performance is artificially created by a handful of wealthy individuals to make a quick buck.

plus my point is with the world economic crisis still there will be a cap in the export market no matter how attractive our exports are due to currency devaluation. i have a bunch of plantation stocks that gave out very good returns during the commodity bubble. i'm in two minds weather to cut my losses now or to hold on. whats your view????

[xXx]

XXX quite true on the fact GK investments and their returns went under the radar of the Inland revenue. Well we'r talking about an Inland revenue where tax files dissappear for a few green notes. I heard the list of the investors on GK went up public on the local newspapers and shouldn't atleast this give the Inland revenue the balls to audit these people and make them justify where all these Millions and billions come from? there was a high suprise number of investors who had well over 5 million on the deck... I know people who had well above 10 million on this.

I believe GK wouldnt have come down if sakvithi didnt come down. It was more like the housing crisis here in the US. These are like virus outbreaks that spread so fast you barely have control. Its possible even Commercial bank or any other financial institution for that matter to fall down if all their investments are withdrawn in a short period of time. I dont blame the economy at all for the downfall of GK. Actually the economy of SL went down becuase of GK.

I also learned the wife of one of our recently assasinated minister's was the first to withdraw money fearing GK being another Sakvithi and a few followed her. And soon everybody tried withdrawing money which ended up putting the directors in line of fire. Anybody who understand how an Insurance company or any other intrest paying company works would understand what GK was doing with their funds. The central bank has its hand on this too.. GK is history now its just another Enron story.. interesting analysis from your end too..

there's no point talking about IRD. as GTAm mentioned there a COPE report on a billion dollar VAT scam, forget about investigating the issue or trying to recover atleast some of the money, not even a single high ranking official was either dismissed or transferred.

i wouldn't go to the extend of comparing the US housing slump to the situation with GK but there are minor similarities. my view is sakvithy simply triggered an inevitable chain of events which was bound to happen in the future. the way how people in charge of the fund handled and pocketed public money is simply horrifying.

i don't think the local economy went down because of GK or sakvithy. it is because of the countries poor economic condition that people was drawn to deposit such wast amounts of money in these type of institutions.

[Mani]

Looks like the LK Rs. is picking up a bit. When I was there early last month I was getting Rs. 114.xx for a $. It has picked up significantly in a short span.

http://www.reuters.com/article/rbssConstru...L46517120090507

[Kavvz]

Looks like the LK Rs. is picking up a bit. When I was there early last month I was getting Rs. 114.xx for a $. It has picked up significantly in a short span.

http://www.reuters.com/article/rbssConstru...L46517120090507

Nopes its devalued further; as the value of the Rupee has gone down since you were last there. Right now its at Rs 117 per dollar so its lost more purchasing power since being at Rs 114 per US $. And when you take into consideration that the value of the US dollar itself has dropped against other currencies, the adjusted SL Rupee devaluation is even higher....

Todays rates are at :

Live rates at 2009.05.08 02:23:38 UTC

1.00 USD = 117.540 LKR

1 LKR = 0.00850774 USD

Edited May 8, 2009 by Kavvz