Market in heavy need of a new direction – Asia Wealth

Monday, 31 October 2011 00:00 - - {{hitsCtrl.values.hits}}

Asia Wealth Management last week headlined its weekly report saying the market is in heavy need of a new direction and questioned whether the Bourse is in mayhem with no guidance.

“The bourse completed the trading week on a dull note apparently with neither domestic nor foreign interest. We believe that the lack of interest by both domestic and foreign parties towards the market could be as a result of the uncertainty. Trading levels were highly unsatisfactory with many investors remaining on a hold and watch stance.

“Albeit with all this negativity, we still expect the market to posture itself as attractive with a combination of growth and value stocks that would be ideal to both the retailers, the high end individuals and the corporates for their investments,” Asia Wealth Management said.

Strong corporate results failed to lift market – Arrenga Capital

Arrenga Capital in its weekly report lamented that the strong corporate performance too seem to have failed to lift market momentum as activity levels continued to lighten to touch the lowest so far in 2011 whilst turnover figures continue to plummet to the bottom.

“Indices took a tussle ride today as it closed in the green but with fewer changes to prices. Investors have been gripped by fear with the big players missing from the market picture as the question whether the market has reached the bottom remains unanswered. No one wants to catch a falling knife but all investors should be aware of market timing. Thus, we opine our investors to turn this short term fear to long term profits by continuing to accumulate on the fundamentally led counters as re-balancing in the depths of a bear market would enhance long term returns,” Arrenga said.

In its Weekly Thought, Arrenga said the current market conditions can be best described as unpredictable and volatile with investor sentiments remaining pretty low. “Any buy recommendation is thought twice by investors. Market is currently suited for investors with a long-term investment horizon of a minimum of two years or more. In spite of short-term risky rallies and associated volatility, we advise our not so aggressive investors to take refuge in high dividend paying counters. Based on our analysis of a two year time horizon, we foresee Nestle (DY–4.1%) and Ceylon Tobacco (DY–6.9%) to come up with a dividend announcement over the next one-month period.”

Retail sentiment to be subdued – Acuity Stockbrokers

Acuity Stockbrokers opined that although the upcoming Q3 earnings are likely to be strong amid robust economic fundamentals, it expects subdued retail sentiment in the week ahead as investors remain on the sidelines. It said last week markets reverted a downward trend once again with the ASPI ending two successive days of declines to close up on Friday. Gainers outweighed losers by 98 to 68 on Friday but turnover remained thin, declining 48% over the four day week to hit a year-to-date low. “Q3 Corporate earnings have thus far been positive with this week’s results – primarily from the Banks, Finance & Insurance and Motors sectors – mirroring strong company fundamentals,” Acuity added.