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Sat, 23 August 2014 14:31:45
Sri Lanka broker equities research biased: analyst
24 Feb, 2012 09:31:46
Feb 24, 2012 (LBO) - Equities research generated from brokers are sales driven and sometimes biased, a new independent research house which is promising more fundamental analysis said.
"There is an absolute absence of independent equities research," Chamikara Gunawardane, director of Investor Eye (Pvt) Ltd, a start up research house, told reporters.

"There is a clear lack of investment research in Sinhala (language)."

Gunawardane said he had been an investment analyst at four Sri Lankan stock brokering firms and has worked at short time at Aegis, an Australia based research firm.

Gunawardane said most brokers wrote research to drive sales and not based on fundamentals.

When the market declined, research also dried up he said.

Brokering firms also faced high staff turnover which also made research erratic, he said.

Investors Eye will provide research in English and Sinhala. Though Sinhala speaking investors are increasing they did not have research back-up. Many large brokerages did not provide research services to small investors, he said.

"Ninety percent of research is currently only in English," Gunawardane said.

"Even if they want to pay and get they cannot buy research (in Sinhala)."

He said the firm will look at macro risks and also talk about downside risks for stocks.

It will provide research on real estate and Treasury bills in addition to stocks. The firm will offer subscription based services as well as individual consultancy.

Gunawardane said based on test marketing conducted by him, he believed that investors were willing to pay for independent research.

Gunawardane said 20 percent of the firm's revenue will go to charitable causes, including foreign scholarships for poor students, funding for elders' homes and spectacles for poor people.

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READER COMMENT(S)
8. upul Feb 28
If traders spend time on research during trading hours, how on earth will they find the time to trade? Research and trading are mutually exclussive but traders need quality research to place winning trades.

One does not get into research just because they cannot trade.

This is yet another cynical comment by the so called english educated arrogant tradr to prevent the sinhala educated non-english educated traders entering the market...Hara hold your horses before you exhibit your ignorance

7. ihi Feb 27
@hara,
you do not get the point. for a trader to make money, you need another party for a trade. since all traders do the same, they won trade themselves Some brokers make money using clients are the other trade party.
6. Hara Feb 25
If your broker knew so much about the market he wouldn't be a broker he would just buy shares and be a multimillionaire and he wouldn't be your broker . He's as clueless as you bit he can advice you and stop you making terrible mistakes based on experience .
5. Rajive de Silva Feb 25
This is a timely venture. Our market has a need for independent research. Most developed as well as developing markets have independent research outfits. Hope the new company will be able to deliver quality and unbiased research to investors.
4. upul Feb 24
Unique business model. Very noble and commendable. 20% allocated for worthy charities!

I am derivative trader and do technical analysis for option trading and willing to help you in your operation. contact:uarunajith@can.rogers.com

u

3. hara Feb 24
As usual lbo wants to bring down the stock market , seems they are on a mission to do this
Why is the heading
"Sri Lanka broker equities research biased"
where is the evidence , put some evidence to this statement, this is just what someone has said why do you use it as a heading.

As usual reporters and online writers just write whatever they feel like writing. If you want people to take you seriously put some evidence and figures to substantiate your claims

2. bandara Feb 24
You are quite right.We saw last couple of weeks market came down to rock bottom levels. When we asked from the brokers what to do they were of the view that mkt will come down further.But when asked why, they have no proper answar to tell.

It was very clear that the foreigners were on the hunting & our poor fellows ruined their hard earned money because of lack of proper backing from brocker firms. Best thing is to close down these broker firms so that we could do our own research & buy shares.

1. MMSB Feb 24
I agree with you. Last 17years I am trading actively and 6 years online trading. Most Brokers, they comments to buy some shares which was they need to sell their shares. Some brokers are using their clients to sell their shares. Then what shall we do? God bless?