Financial Times - Good corporate results but shares unlikely to rise

Good corporate results but shares unlikely to rise

Most March companies are expected to announce good results next month, but their share prices will not move in tandem, according to industry analysts.

Shares aren't expected to set the market alight after results.

Eranjan Kulatunga, Senior Research Analyst, C T Smith Stockbrokers told The Sunday Times FT that the first quarter of 2005-06 results of companies in the tourism sector were poor but despite a pick up in the following quarters upto March 2006 this performance will not significantly impact on share prices.

“Tourism sector firms especially those who have properties in the Maldives will see a jump in the corporate performance, but that is expected by the market because during the first quarter in 2005 the hotels were impacted badly from the tsunami. However during this quarter tourism has done well and Maldives has done exceptionally well,” he said.

“The companies have to make a truly exceptional performance to move share prices. Unless those performances are significantly better or worse, than the expectations of the market, share prices are unlikely to rise.”

He said surprise earnings or specific deals such as takeovers or mergers and declaring dividends could move share prices in the present political and economic environment.

“The Dialog share prices did not react despite the company’s good performance, because investors are just not interested,” he said.

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