Strategy Note /

Sri Lanka: Equity Strategy 2022 – The Race To Beat Inflation

  • Equity Strategy

  • Global Scenarios…Equity Markets Vs Inflation

  • Asia Securities Research Sector Outlook

Asia Securities
7 January 2022
Published byAsia Securities

2022 equity outlook – key takeaways

  • Another Unprecedented Year For Equities As ASPI Continues On Its Hockey Stick Trajectory…

  • …Supported By A Manufacturing & Logistics Drive; Large Caps Remain Dormant

  • Local Investors Were At The Forefront In 2021 With Rates Remaining Low…

  • …Which Led To Higher Flows Into Equity Markets, Driving Up Liquidity

  • Negative Real Rates To Continue Into 2022

  • On A Regional Context, Sri Lanka Still Remains At A Discount To Its Regional Peers…

  • …However, We Do Not Foresee Much Foreign Participation In 2022 On The Back Of Deteriorating Macro Indicators And Rating Downgrades

  • Corporate Earnings: Momentum To Continue Into Early 2022; However, Uncertainty To Continue On Macro Headwinds

  • Likely Moderation Of Global Commodity Prices In 2022, Although Crude Oil Prices Will Remain Elevated On Strong Demand For Energy

  • We Forecast ASPI To Reach 14,500-15,500 In 2022; Expect ASPI Multiple Expansion Amidst Inflation As Corporate Earnings Moderate

  • Equity Markets Located In Countries Experiencing High Inflation Have Tracked Inflation In The Past