All the listed company share prices have, during the post war period, run ahead of their reported earnings with investors being bullish on the future expecting an economic boom, according to analysts.
Srimal Liyanage, Lead Analyst at Investor for Securities, a Kuwait investment Company, said that during this immediate period, the investors were bullish on the whole about the prospects that the Sri Lankan economy would hold and also about the contributions from the liberated areas.
“As was expected some companies started to generate substantial growth in their earnings in the final quarter of 2009 and supported the increase in their share prices,” he said in an email, adding that shares like Lion Brewery and CIC, etc. are undervalued taking into account their most recent performance.
Sarath Rajapakse, Director - Capital Trust said that there has been an improvement in share prices since the end of the war. This is due to investors and traders looking at the projected future earnings when considering listed firms’ price to earnings ratios, etc, he noted.
Charuka Suchendra, Research Analyst - Asha Phillip said that during the past few months some counters made gains but those gains cannot be justified based on fundamentals of these shares, since they made some headway in the market based on speculation or price sensitive announcements that were published by those companies.
Jaliya Wijeratne, Director - SMB Securities noted that there is high potential for most companies and sectors, and as a result their earning potential is expected to increase over the medium to long term.
“Therefore prices of most counters are expected to reach levels we have not seen before. It is always better to look at future earnings,” he said. |
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