Some investors and stock analysts are raising questions as to why some brokers, despite the John Keells Holding's (JKH) share price crashing in the last few months, are advising investors to buy the share.
The stinging Supreme Court Judgment on the company's subsidiary, Lanka Marine Service Ltd (LMSL) rendered JKH share price rudderless during the last two months plunging it to an almost 32.2 % decline. Since February last year the share has fallen by 54 % and lost about 36 percent in value since January this year.
"Some directors in those brokering firms may have vested interests in 'holding' the share price in JKH," a stock analyst said. He said the company's earnings in the future and such fundamentals should be in the forefront when investors are advised. An investment advisor however said that savvy investors will ‘cut the noise’ in making their purchase decisions. "Some investors may feel it is the best time to buy with the share price declining, but it all boils down to how valuable the JKH share is," he added.
He also said that many brokers are targeting the short term retailers when giving them the 'buy' option on JKH.