Keen interest in banking stocks after DDO
With interest rates coming down, cash that was packed, in fixed-income securities will now move to equities in the Colombo Stock Exchange, stock market analysts say.
“High-interest rates will not do any good for the equities market. We see inflation coming down, which is also a positive,” Ruchir Desai, Co-manager of the AFC Asia Frontier Fund at Asia Frontier Capital, said.
Analysts expect that investors will start factoring in earnings recovery for next year and will start buying equities now. Some analysts said that they saw pockets of investors coming in over the past few weeks but were not so sure about foreigners coming in soon. This is mainly because they want to see the currency movements in the next few months.
Low-interest rates will spur consumers to borrow for housing and consumption, bankers say. “Now they can borrow at cheaper rates. The high valuation in the banking sector is already reflected in the stock market,” Sanath Manathunge, Managing Director, Commercial Bank told the Business.
Analysts also pointed out that the answer currently of the domestic debt restructuring DDO is over, which is why there was a relief rally on the banking sector shares recently.
Credit should be more affordable to get the private sector growth going, they noted, saying that real interest rates are critical for the growth trajectory to get back on track.
Hitad.lk has you covered with quality used or brand new cars for sale that are budget friendly yet reliable! Now is the time to sell your old ride for something more attractive to today's modern automotive market demands. Browse through our selection of affordable options now on Hitad.lk before deciding on what will work best for you!